Reports of Ramadan price hikes rejected

UAE food retailers and distributors have rebuffed claims that they exploited Ramadan.

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By  Roger Field Published  December 15, 2005

Food retailers and distributors in the UAE have slammed reports that they inflated prices to cash in on Ramadan. Prices of goods considered vital for Ramadan and Eid Al Fitr “sky-rocketed” according to some local newspaper reports, which pointed to an increase in the cost of foods such as sugar, potatoes and other vegetables as evidence of retailers exploiting Ramadan. Some reports claimed that 100kg bags of sugar increased to AED200 from AED156, after distributors and retailers inflated their prices, while potatoes were also said to have increased in price significantly. But many retailers and distributors have rejected the claims. For example, Naser Ali Odeh, general manager at GulfCo, a Dubai-based food distributor, said it was “absolutely not true” that prices had increased during Ramadan. “There have never been price hikes during Ramadan,” he told RNME. “Ramadan is the cheapest time in the whole year. I do not think there were price hikes. Retailers want to create more of an appeal to consumers during these times, and this usually means lowering prices.” He added that if prices of certain items had increased, it was likely to be due to market forces and inflation, rather than suppliers taking advantage of Ramadan. “Price increases are a global phenomenon,” Odeh said. “Prices rise wherever you are. If the price of raw materials increases, there will be adjustments on pricing. “Rents are up, there’s the rising cost of delivery fleets, medical costs. Everything has been going up. There is one party supporting the view that this is due to government salaries increasing. I do not think this is true.” Odeh found the reports particularly annoying because the management of GulfCo had decided to freeze its prices between February and November. “We had a general meeting not to apply price increases. There has been no increase in the last nine months,” he said. Khalid Salamat, director of marketing, HBG Holdings, is equally sceptical of the reports. He said the price of goods including juices, dates, rice, cheeses, milks, creams and custard, had fallen during Ramadan and Eid. “As far as the goods we are dealing with, there is evidence of promotional activity in the form of twin packs at reduced price, and other offers,” he said. While Salamat agreed that the price of potatoes in the UAE appeared to have risen during Ramadan, he thinks this is more likely to be due to a shortage of supplies, and high consumption levels during the period. “It was more of a supply chain issue than a retail channel issue,” he said. “If [price increases] had been caused by traders, it would have been done across the board, they wouldn’t have done it for just a couple of items.”

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