Consumer protection proves very costly for shops in Oman

Consumer protection proves very costly for shops in Oman
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Published April 8th, 2014 - 10:55 GMT via SyndiGate.info

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Distributors have to get prior approval from consumer protection body to increase prices of any product
Distributors have to get prior approval from consumer protection body to increase prices of any product

Laws protecting Oman consumers from hikes in the price of goods or defective products are being strictly enforced in a fresh crackdown in the Sultanate, but supermarkets bosses say they are suffering.

In one case a shop manager and his worker were arrested, had their passports confiscated and eventually were forced to pay a OMR1,000 fine over a bar of expired soap.

Oman's Public Authority for Consumer Protection is insisting on strict adherence to regulations and has strengthened its vigilance on supermarkets and hypermarkets, which is being backed up by courts which are handing out punitive fines to send a clear message.

Hefty fines

As per the regulations, distributors have to get prior approval from consumer protection body to increase prices of any product and a copy of the approval letter has to be handed over to supermarkets or hypermarkets as a proof for revising prices. Any change in prices without the prior approval from the consumer protection body attracts hefty fines, running into several thousand rials. Good news for the general public but retail chains say they are bearing the brunt.

Omar bin Faisal Al Jahdhami, director general of consumer services at the Public Authority for Consumer Protection, said that the regulations are not new.

In November last year, the consumer protection agency asked supermarkets and hypermarkets to submit a complete price list of their outlets in electronic form for the agency to check prices, he said.

"And any increase in prices has to be approved by the consumer protection agency. This approval is sought by the suppliers or distributors (and not retail outlets)," added Al Jahdhami.

Al Jahdhami added that fines are decided by the court and rather than the consumer protection agency.

Mohammed Azeem S., country manager of a leading retail chain in the Gulf region, said there is a huge difference in terms of fines between various regions due to lack of clear-cut guidelines.

For instance, a leading supermarket has paid a hefty fine of OMR1,000 for a case linked to a price difference in Rustaq region, while the fine was only OMR10 for a similar case in Sohar.

In another case, the retail chain had paid OMR2,000 for keeping an expired soap, which came up in the court after 14 months.

"We had three cases last month. One was for keeping the expired soap. The manager and shelf-in-charge were arrested, their passports were impounded and they were asked to pay OMR1,000."

Sources in retail sector also noted that the frequent inspections are in interior regions and Muscat region is an exception.

Azeem said that consumer protection agency officials in Rustaq region has asked one of the outlets to submit the complete price list with a seal within ten days.

The authorities have given a print-out of the price list, which was earlier provided by the shop in last November.  

Several popular food items, including Saudi-based Almarai's long-life milk, Holland's Rainbow milk and the UAE's Masafi mineral water, are now either in short supply or completely out of stock in several retail outlets.

Crackdown on shops

Azeem said the distributors of these products had been refused permission to increase prices in the last two to three months, in an apparent move to contain inflationary pressure in the country. Inflation rate in Oman dipped to 0.6 per cent in February over the same month the previous year, down from 1.2 per cent inflation in the previous month.

"A request for raising prices from Masafi was not accepted by the agency and therefore, they are withdrawing the product (from Oman market)," said Azeem. "Distributors have requested for price increases (on several occasions) and there was no approval coming from consumer protection agency in the last two or three months," echoed Faisal V. P., general manager of Al Karama Hypermarket.

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