Dubai Consumer Mirror

Wednesday, December 28, 2005

As if no one saw it coming

I highly doubt this story made the English press, as Al Bayan is claiming exclusivity. I will try to translate the most important bits.

You get to choose how you want to react to it.

HEADLINE:
AL BAYAN REVEALS PRODUCTS EXPECTED TO INCREASE PRICES

BODY:
تنشر «البيان» اليوم نموذجاً لقوائم زيادات الأسعار التي طالب بها الموردون الذين هددوا بوقف توريد منتجاتهم مع بداية العام المقبل إلى الاتحاد التعاوني الاستهلاكي اذا رفض الزيادات التي تتراوح بين 10 إلى 30%.

Several UAE based Suppliers today are threatening that if Al Ittihad (Union Coop) does not accept the 10 to 30% prices hikes for the coming year, they (suppliers) will halt the distribution of their products to the Coops. Albayan is printing a sample of some of the products thats prices will go up.

Interesting!

وحذر الاتحاد من ان الرضوخ لطلبات رفع الأسعار سيكون مثل كرة الثلج التي ستشجع على تكرار الزيادة وسوف تدفع الموردين الآخرين للمطالبة بزيادة على أسعار وارداتهم وطالب الاتحاد بتدخل صريح من جانب الحكومة والجمهور والرأي العام لدعم موقفه الرافض لقبول الزيادة التي طالبوا بها.

The Union Coop warned againt giving-in to these requests as they will have a grave "snowball" effect by encouraging other suppliers and consumer prices to increase their prices. The Union demanded a strong intervention by the government, consumers and public opinion to supports the Union's rejecting stand against the price hikes.


Lets see.. the government is still warming up to give the newly Consumer Price Index a trial run, Consumer Protection in the UAE is a joke and everyone knows this and the public opinion? YEAH RIGHT.. how much are you paying for petrol today?

ويأتي ذلك في الوقت الذي بلغت فيه مطالبات الزيادة إلى 60% من قبل إحدى شركات الزيوت والى 64% لأحد أنواع الألبان كما دخلت صناعة الخبز على خط الزيادة خلال طلب مبدئي تقدمت به هيئة المخابز

This comes at a time a private vegetable oil company requested a price increase that reaches up to 60%. A dairy products company to also announced a 64% increase on all their retail prices. Also, The Bread Producers Syndicate requested a price hike on the retail price of bread and other baked products.

Anything but bread, ask the Egyptians and Jordanians during the late 80s.

وطالبت مصادر الاتحاد التعاوني الاستهلاكي بتدخل حكومي مباشر لقمع هذه الزيادات خاصة بعد التأكد من قبول بعض الشركات الخاصة ومحلات بيع التجزئة لطلبات الموردين بزيادة الأسعار بل والتقدم بطلبات شراء للعام المقبل بالأسعار الجديدة المفروضة من قبل الموردين

Sources from the Union demanded immediate government intervention to halt these price hikes especially after many Suppliers have confirmed that other "private" stores and supermarkets did not only accept the price increments, but already submitted purchase orders with the new prices for 2006.


Of course they will! Who cares? Consumers in the UAE are like sheep. Whenever they are told to bend over, they make some noise for a while, maybe b!tch and moan about it in 7days a little, then they give in.

وأشارت المصادر إلى أن هذا الأمر سيؤدي إلى خلق أزمة بالنسبة للجمعيات التعاونية نظراً لفقدان الموقف الموحد وغياب المساندة الحكومية بالرغم من محاولات التنسيق التي يبذلها الاتحاد الاستهلاكي التعاوني بين الجمعيات التعاونية من جهة وبين وزارتي العمل والاقتصاد من جهة أخرى من أجل وضع السبل الكفيلة بالتصدي لظاهرة زيادة الأسعار.

Sources also indicated that in spite of several coordination attempts between coops and the ministries of Labor and Economy to stop the price increases, the lack of a strong unified stand by Coops along with the lack of government support will further worsen the situation.

OK... here comes the HOT STUFF;

ومازالت الشركات تتقدم بطلبات الزيادة إلى الجمعيات التعاونية حيث تقدمت شركة الوطنية للدواجن بطلب لزيادة أسعار منتجاتها موضحة أن هذه المرة الأولى التي تطلب فيها رفع أسعارها منذ أربع سنوات لتصل إلى 9.5 دراهم للكيلو الواحد من الدجاج المجمد، وشركة بطاريات إنرجايزر التي تتراوح الزيادة في منتجاتها من 18% إلى 20%، وهيئة المخابز المكونة من ستة مخابز والتي طالبت من خلال طلب مبدئي بطلب لزيادة الأسعار موقع من الأعضاء يوضحون فيه أن غلاء أسعار المواد الأولية كالطحين والسكر والحليب والزيوت تؤدي إلى خسارتهم.

Many companies are still applying for price increase. Al Wataniya Chicken requested the price of frozen chicken to go up to Dhs 9.5/KG, claiming this is the first time they increase prices in 4 years. Energizer Batteries are expected to go up 18% to 20% on all its product. The Bakeries Syndicate (a private body of six major bakeries) submitted a price-increase request that is signed by all members of the syndicate. Their justification is the increase in basic material such as flower, sugar, milk and oils is causing them losses.

But wait .. this gets even better..


بالإضافة إلى الشركات الأخرى التي قدمت طلبات سابقة لزيادة الأسعار والتي تنوعت بين المنتجات الغذائية والاستهلاكية والتي اختلفت نسبة زيادتها حيث تقدم مورد زيوت الوزير بطلب لزيادة الأسعار بنسبة تصل إلى 60% على جميع منتجاتها المختلفة الاحجام والمقاسات مشيرة إلى أن السبب في هذه الزيادة هو النقص الكبير في الزيت الإسباني ما يؤثر بالتالي على إنتاج الزيوت.

Many other vendors also requested price increases with various percentages. Olive oil producer Al Wazeer (or Al Wazir) announced that it is increasing prices by 60% on all its products. Al Wazeer is saying that the cause of this hike is the shortage in Spanish olive oil supply.

Syria and Lebanon produce superb olive oil btw...

كما أن الزيادة تطال منتجات حليب أبو قوس حيث يصل سعر العلبة الواحدة إلى 1.85 درهم بعد أن كانت 1.30 درهم ليصل سعر الكرتونة إلى 48 درهماً بزيادة تصل إلى 5%، وأرز السنارة أيضاً تقدم بطلب لزيادة أسعار منتجاته بنسبة تصل إلى 10% رغم زيادة أسعاره قبل فترة قريبة كما أن شركة الإمارات للتكرير والتي تنتج المايونيز والكاتشب أيضاً قدمت طلباً بزيادة منتجاتها وبنسبة تصل إلى 10% كما أن شركة منتجات حليب الأطفال نان1 ونان2 وناب آر وجوي كوز1 جوي كوز2 طالبت بزيادة كذلك، بالإضافة إلى طلب زيادة أسعار مواد التنظيف والصابون كاللوكس والفا والشامبو ومزيل العرق وبأنواع مختلفة وبنسبة متفاوتة تتراوح بين 10% إلى 20%.

Rainbow Milk will jump from Dhs 1.30 to 1.85. 'Al Sennara' rice increased by 10% as well as Emirates Mayonnaise and Ketchup by 10%. Infant and baby milk brands Nan1, Nan2, Nap R, Joy Cos1 Joy Cos2 alo by 10%. Price of body products like Lux soup and other types of shampoo, deodorant will increase by 10 to 20%.

Way to go P&G ...

وعلمت «البيان» أن بعض الجمعيات التعاونية عملت منذ فترة سابقة على إيقاف تعاملها مع عدد من الموردين نظراً للخلافات التي نشبت بينها وبينهم على ضوء الطلبات المتكررة في زيادة الأسعار وبشكل لا يتناسب مع سياستها ومنها منتجات إم إم آي ومنتجات زيت العربي ومنتجات بريل كريم وجميع منتجاتها

Al Bayan revealed that several Coops already ceased working with several suppliers due to disagreements regarding too frequent price hikes and incompatible pricing prices by companies that supply MMI products, Bryl Cream products and Al Arabi cooking oil.

more items off my shopping list as well..

من جهته أكد الدكتور سليمان موسى الجاسم رئيس الاتحاد التعاوني الاستهلاكي على ضرورة إشراك كافة قطاعات المجتمع في مواجهة محاولة موردي المواد الغذائية الرئيسية رفع الأسعار كضرورة تفرضها ظروف حماية المجتمع من الآثار السلبية لغول الغلاء.

Dr. Sulaiman Mousa AlJassim, president of the Union Coop called for all members of the UAE community to stand against this price hikes by foodstuff suppliers and warned against the "monster" of price hikes.

ودعا الحكومة إلى حماية الجمهور الذي يتكون معظمه من محدودي ومتوسطي الدخل، موضحاً أنه على الحكومة أن تضغط على منتجي ووكلاء الأغذية حتى لا يتصيدوا الفرص لاستغلال الجمهور والبسطاء برفع الأسعار ما يؤدي إلى أن تصبح الدولة بلداً عالي التكاليف وطارداً للشركات العالمية التي ستتجه إلى دول أخرى أقل تكلفة في ظل المنافسة القوية التي تستهدف اجتذاب الشركات العالمية.

He also called upon the government to to protect the public that consist mainly of middle to the lower income range. He also said that the government has to intervene to stop these exploitive measurements and allowing them to increase prices like that will harm the country as it will become less attractive to foreign investors, who will look for less expensive competitive destinations.

Finally, someone speaking some sense. Consumption, is one of the components of GDP (Gross Domestic Product), which is any nation's growth indicator by measuring the dollar value of goods and services produced in 1 year.

Now, with the price of everything else (rent, petrol, untilties..etc) soaring, disposable income is shrinking even more that it already is, forcing locals and expats (the majority of the UAE community) to take corrective measure.

The most common expat corrective measure is partial reallocation. And thats when a family head decides to send the rest of his family back (wife and kids) to their home country. The pseudo-bachelor will then bunk-in with 3 or 4 other bachelors. This is the most common case and its already happening alot in the UAE.

Then you have total reallocattion to another country. Which is, on the long run, a major loss to any nation. Especially of the nation is heavily dependent on middle/lower class labor. Because all the acquired experience which expat workers gained in -and paid for by- the UAE, will be used by another welcoming nation. Similar thing happened in Kuwait in post Gulf War II when all the skilled labor moved to the UAE, Qatar, Saudi after the Iraq invasion in '90 and '91.

The effects of this phenomenon on the economy are very severe. First, it will slow down the country's money cycle (no more ongoing family expenses - bachelors live very simple/ less expenisve lives) more people will reply on credit and the economy will suffer cash shortages.

This will also cause major drop in foreign currency reserves since majority of expats are both saving their money and transferring the rest to their families back home - its also called cash flight -.

Additionally, the lost business caused by family members leaving school, not buying from groceries, laundries, leisure services .. etc, will damage small businesses in the UAE - which are about 80% to 85% of the UAE economy.

Middle and lower income locals will find it very difficult to adapt to the new prices. As a result the government might be forced to increase wage (again), hence inducing more inflation and basically adding more zippo fluid to the burning prices.

Many locals will revert to bank loans and credit cards to make ends meet... more defaulters, more crime .. basically, all the signs of a total recession.

Of course i will not even go near the social issues that will come along all this. It is only the tip of the iceberg.

This scenario may sound very pessimistic, but it is very real. It happened to almost every nation in the world, and the UAE is no exception. The way things are going right now, it looks more and more realistic.

So are we gonna react??

14 Comments:

  • Pessimistic...no; realistic...yes. We already spend less here, and it is on purpose. We buy a lot of what we need when we go home to the US or on business trips, with the obvious exceptions. There is nothing like feeling raped to curb consumption.

    By Blogger sheikha cheryl, at December 28, 2005 at 1:45 PM  

  • "Consumer Protection in the UAE is a joke and everyone knows this"

    very true - i needed to complain about a shop that ripped me off the other day. I didn't know where to go (the police, the ministry?).

    I walked out with my tail between my legs thinking whether to write a letter to the paper or not - alhtough i knew this won't make any difference and the shop will get away with it..

    By Anonymous Anonymous, at December 29, 2005 at 9:18 AM  

  • People who work in high official posts are sponsors or owners to all big businesses .. how are you going to complain?

    By Anonymous Anonymous, at December 29, 2005 at 10:31 AM  

  • "There is nothing like feeling raped to curb consumption".

    Rape is not a big deal out here so the rest follows that anything else is not a big deal either.
    But this is a fact, it's a catch 22 situation isnt it? The people who can complain and do something are the ones who also own the distribution rights to the same companies who are the transgressors.
    It is really so simple ,it is impossible.
    "alia jacta est"
    (the die is cast- Julius Ceaser)

    By Blogger kaya, at December 29, 2005 at 11:19 AM  

  • The best example of how bad consumer protection is RENT laws in Dubai..

    I've never seen a place that stands alongside the landlord against the tenant...

    My friend went to DM because his landlord doubled the rent of my freind's 10 years old apartment..

    The so-called committee told him: "if you can't pay, then leave"

    Priceless

    By Anonymous Anonymous, at December 29, 2005 at 11:41 AM  

  • "if you can't pay, then leave"

    After everyone leaves, who is going to wipe their asses? The labor drain is going to begin shortly.

    What a joke! The Shopping Festival is just around the corner. Come to Dubai, a world class city, spend your money on cheap inferior goods made in China, then go home. Everything in this city is a fake, dirty mafia driven racket. There is nothing legitimate here anymore, if there ever was.

    By Anonymous Anonymous, at December 29, 2005 at 4:52 PM  

  • to anon@9.18am

    Yes actually you can do something about it. If you have not received the service that you have payed for then you can go to the Department of Economic developement (opposite the Sheraton Hotel, creek road) and make an official complaint,and they will immediatley send out the troops to investigate and solve your problem. Businesses can only receive so many complaints before their license is pulled. You can also try threatening them with this action. It often works a treat.

    By Blogger CG, at December 30, 2005 at 1:12 PM  

  • it just drives me through the wall that the majority of people don't do anything serious about it. I've have seen pages and pages of angry letters - but that proved to be an impotent tactic. how about doing something more effective?

    For example: create a form of a body or a watchdog that communicates the importance of consumer protection to the public, the need to stand up for consumer rights and maybe stay in contact with influencer's and officials regarding better implementation of consumer protection legsitations..etc

    There are also some gorilla methods like boycotting, publicizing and sharing stories on blogs, mailing lists ..etc on certain shops/brands that are notorious in screwing people over...

    By Blogger moryarti, at December 30, 2005 at 4:04 PM  

  • moryarti,,

    good of you to comment about the lack of consumer protection. today i argued with a salesman in a sony store till i was blue in the face about their worldwide warranty.

    apparently worldwide means "7 countries" only as listed by their sucky standards. last time I checked there were more than 120 countries in this world.

    i hate this "buy now, get screwed later" attitude.

    By Blogger BuJ, at January 1, 2006 at 12:47 AM  

  • Are the price rises in Dubai not market forces at work? We're living in a capitalist society driven by supply and demand, not a communist paradise.

    That said, if prices are being driven up by incompetence and bad planning, what are people supposed to do..?

    By Blogger redstar, at January 2, 2006 at 9:42 PM  

  • "Are the price rises in Dubai not market forces at work?"

    No they are not - the average (acceptable) rate of inflation in any stable economy ranges from 3 to 5% a year. What we are witnessing here is pure profiteering - hint: RENT

    "a communist paradise"

    Thats the oxymoron of the day. In the last 3 years, Dubai turned into a 'sellers' market and everyone knows this. Its a "you don't like it? then go f@#$ yourself" marketplace. Other mature economies have consumer protection. If you didn't like the what you had for dinner.... you don't pay for it. If you are not happy with the product you bought, you get a full refund. Thats a market place driven by supply and demand.

    I lost count of the number of times i had to haggle my way through for a replacement for a defected good and the word "refund" is not recognized by the majority of retailers here.

    If you got screwed over by a shop? what do you do? go to the police? look for the shop owner? "demand to see the manger"? go to the DED? economic department?

    Thats the problem - no one really knows.

    By Blogger moryarti, at January 2, 2006 at 10:37 PM  

  • Regarding RENT,
    If you take a complaint to the *Rent Commitee* (pretty useless from what i've read so far), don't they charge you some percentage of your rent to take up the case?

    Very good tactic I'd say.

    About the *authorities* reacting,

    1.I really don't know who handles stuff anymore DED/POLICE/COURTS?

    2. Do any of them actually pay attention to the media? A lot of people complain on radio & papers, but it seems useless.

    3. Look what happened to the DNRD a few days back. No one even thought of a backup measure in case of a total system crash? Oh I forgot, why bother thinking.. we'll wait till disaster strikes.

    I shudder to think what would happen once the DNA tagging begins!

    By Anonymous Anonymous, at January 5, 2006 at 10:31 AM  

  • Thats the oxymoron of the day. In the last 3 years, Dubai turned into a 'sellers' market and everyone knows this. Its a "you don't like it? then go f@#$ yourself" marketplace. Other mature economies have consumer protection. If you didn't like the what you had for dinner.... you don't pay for it. If you are not happy with the product you bought, you get a full refund. Thats a market place driven by supply and demand.*thats wat is happening there is no price control ..these ppl are putting a price tag according to their wish every day there is an increase on their products* something needs to be done really ...some authority should monitor the pricing !!!

    By Blogger mins, at June 7, 2008 at 4:34 PM  

  • well alkl of us need to do something ill try to spread this forum to ppl ...ppl r so bz wakin up at 4 n getting home at 9 that they dont ve the energy left to counter these blood suckers.. but hw long this will go i really wonder ...there is no control its more like do wat u wanna do n let the wrld just kiss ur ass if they dont like it

    By Blogger mins, at June 7, 2008 at 4:41 PM  

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