UAE Ministry of Economy and Carrefour sign MoU to fix prices of 52 food commodities

The UAE Ministry of Economy (MoE) and MAF Hypermarket (Carrefour) have signed today (Thursday, April 17, 2008) a Memorandum of Understanding (MoU) that will see Carrefour fix the prices of several basic food commodities throughout 2008. The move is part of a series of initiatives to implement the first phase of a program wherein Carrefour will retain the 2007 prices of around 52 prime commodities in the UAE.
 
H.E. Mohammed Bin Abdul Aziz Al Shihhi, Undersecretary, MoE; and Mr. Henri Changeux, Senior Vice President of Carrefour, have signed the MoU at the Ministry's offices in Dubai.
 
"The signing of the memorandum of understanding with Carrefour is the result of discussions and cooperation between the two parties, and is in line with the continuous efforts by the Ministry to stabilise prices, reduce inflation levels, maintain market balance and protect the consumer. It is also part of a series of initiatives implemented recently by the Ministry that aim to encourage private sector companies and cooperative unions to support the Ministry's call to fix prices of basic food products and sell them at cost prices," said H.E. Mohammed Bin Albdul Aziz Al Shihhi, Undersecretary, MoE.
 
"This initiative emphasises the social responsibility of the private sector and is in line with the directives of H.H. Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE and Ruler of Abu Dhabi, and H.H. Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. It also promotes cooperation between the government and private sectors in pushing economic and social development in the country," added Al Shihhi.
 
Al Shihhi also stressed that maintaining market stability and protecting consumers is not the sole responsibility of the Ministry, but a joint responsibility wherein federal and local-level government efforts are integrated with initiatives by the private sector and civil institutions in order to eradicate negative practices that affect consumers, the society and the national economy. Al Shihhi also indicated that as inflation is an international phenomenon experienced by all countries, the Ministry, in cooperation with the other concerned authorities, will continue to combat any form of monopoly or exploitation that may threaten market stability.
 
Al Shihhi also emphasised that through the MoU with Carrefour, which is one of the largest companies in the wholesale and retail sector, the Ministry will leverage the two parties' qualified workforce, technical equipment, advanced technology, and scientific and practical experience to protect the consumers and maintain price stability in the UAE's wholesale and retail sectors, in addition to developing new competitive markets that are free of monopolies and illegal practices, and where quality, safety and competitive prices prevail.
 
Under the MoU, Carrefour will fix prices of 52 basic food commodities at 2007 price levels. The goods include four types of rice, three types of egg, three types of milk, four types of frozen chicken, 10 types of fresh chicken and bread, two types of meat, two types of tomato paste, three types of sugar and salt, two types of vegetable oil, six types of macaroni, two types of beans, two types of tea, two types of water and four types of flour.
 
The parties are also working to undertake the necessary procedures to support stability of the wholesale and retail sectors as per the laws and regulations applicable in the UAE.
 
Al Shihhi referred to the initiatives that have been launched and are being planned to be launched shortly by the Ministry as part of its responsibility to supervise the strict implementation of the government's policy to protect consumers, in cooperation with concerned authorities in the country. The Ministry is also committed to confront illegal commercial practices that affect consumers, in addition to ensuring consumer safety and health, and maintaining economic and environmental protection by ensuring that services and consumer goods and other commodities are of high quality and strictly meet the specifications and standards of the UAE.
 
The MoE also singed last week a similar MoU with Lulu Hypermarket Group, as the first phase of a program to fix prices of 32 goods at 2007 levels. The Ministry also signed in March an MoU with the Union Cooperative Society in Dubai to fix prices of 16 basic goods at 2007 levels, and as per specified values and agreement. Other cooperative societies have likewise responded to the Ministry's call by selling several items at cost prices, in line with the continuous efforts to control price rise and curb inflation.
 
In accordance with the government's economic strategy, Al Shihhi said the Ministry is keen to reduce inflation rates by adopting relevant economic and social policies to control the increase of prices of goods and other services. "The UAE is witnessing distinctive economic realities and comprehensive development in different sectors; these have been accompanied by some unavoidable market conditions such as increase of inflation rates, which the government is striving to reduce," said Al Shihhi.
 
Al Shihhi pointed out that the positive economic development witnessed by the UAE and other countries in the region have contributed to the increase in demand of various goods and services. "Some individuals and companies tried to exploit the present situation by forming monopoly groups in the market, which is against the spirit of fair competition that characterises the UAE market. This does not correspond to the nature of the national economy and negatively influence the principle of free economy, which the country is adopting," said Al Shihhi.
 
Al Shihhi also said that the government has adopted proactive initiatives to control the increase of prices and shortage in supply of different goods, particularly food products, and to eliminate monopoly by establishing agencies for 16 basic food items and implementing the concept of collective purchase for basic consumer goods; the government has also implemented customs exemption on several high-demand products such as cement and steel imports. All these initiatives have resulted in availability of goods at normal prices without affecting quality and supply.
 
Al Shihhi praised Carrefour as it is the second private sector company in the country to respond to the Ministry's call, indicating that this move emphasises the vital role the private sector plays in maintaining market balance and contributing to the development of the society and the national economy.
 
Al Shihhi called for strengthening cooperation between the government and private sectors to confront price increases, which have significant social and economic impact, confirming that the private sector can contribute substantially in alleviating sharp price hikes of consumer goods through joint initiatives that ensure provision of basic commodities for UAE nationals and residents.