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02 October 2023

Big Mac to cost more... but not in UAE for now

A woman walks out of a McDonald's restaurant in New York. (REUTERS)

By Joseph George

McDonald Corp's plans to raise prices may not be immediately implemented in the UAE, sources have revealed.

According to media reports the company has announced plans to increase the price of its products including the most popular burgers between 2-4.5 per cent in United States and Europe.

But sources close to the company in the UAE this morning said there may not be an increase in the UAE for the time being.

According to Reuters, the decision to increase prices in the US and Europe is to help offset an expected rise in its grocery bill for the 10 commodities that account for around 75 percent of its food preparation costs.

“Beef, chicken, bread and milk products, paper, cola, ketchup and other sauces, and fruits and vegetables top McDonald's US shopping list. McDonald's expects its costs to rise 2 percent to 2.5 percent this year in the United States and 3.5 per cent to 4.5 per cent in Europe,”the report said.

Quoting Chief Financial Officer Pete Bensen it said said McDonald's would only “raise prices where it makes sense" to offset some, but not all, of the cost increases. McDonald's did not give a commodity forecast for Asia and its other markets.

With most of UAE's food products imported from abroad, rise in prices in Asian and European markets would have an impact on p[rices here.

Local media reports have also warned that prices of essential food items like grains and vegetables may rise by up to 30 per cent in the UAE.

Meat prices in the UAE have risen by almost 15 per cent during the past few weeks - a reflection of increase in prices in Australia, Brazil and India.

Just recently Pepsi and Coca Cola increased the price of its drinks by fifty per cent following an increase in the price of Sugar.

According to the UAE Ministry of Economy prices of all locally produced beverages were increased by 25-50 per cent from January and applicable to new products.

Mohammed Al Shedi, director general of the ministry of economy had said that the ministry’s consumer protection committee, which turned down a request by beverage producers more than a year ago to raise prices has now approved a request by Coca Cola, Pepsi and other beverage manufacturer for a price rise following an increase in their cost of production due to higher prices of raw materials.