Monday, September 25, 2006

Consumer Protection, UAE Style

Food producers are trying to increase their prices during Ramadan. Allegedly.

Emirates Today carries a very puzzling article today. It seems that some food suppliers are trying to increase their prices, but good old Union Co-op is not allowing them to. How bizarre, I thought we lived in a free-ish market economy. I say free-ish because the still-not-abolished Agencies Law causes a lot of price distortion, none of it in favour of end-users.

The story focusses on the fruit drink Vimto, which you can buy for Dhs 5 a bottle in Saudi Arabia and Oman, but costs Dhs 8 in the UAE. The producers want to increase the price still further but the Co-op has refused the increase, as a result of which Vimto is no longer supplying the Co-op.

The AGM of Union Co-op in Dubai says that this has angered some of their customers:

“We, as Union Cooperative will not lose anything if we increase the prices.

“However, we did not want to harm them during this month, and thus stopped the price increase.

“In this, we are losing sales of 10,000 cartons of Vimto during Ramadan, but still we will not step back.”

So the poor customer who wants to buy Vimto will have to go somewhere else and pay 9 or 10 dirhams for it. Union Co-op refuses to give them the option of buying it at any price, and thinks it is doing the customer a favour.

And what does this have to do with Ramadan? Nothing in particular, it just happens to be Ramadan now. The AGM is photographed in the article holding up a letter from a supplier that announces a proposed price increase. It is dated April 23rd.

File under, nose, cutting off to spite face.