Business | General
Union Co-op will not hike dairy product prices during Ramadan
Union Co-op, the Dubai headquartered retail chain, intends to stand its ground and will not raise prices of dairy products during the crucial Ramadan period, according to a senior official.
- By Manoj Nair, Staff Reporter
- Published: 00:00 October 16, 2004
Union Co-op, the Dubai headquartered retail chain, intends to stand its ground and will not raise prices of dairy products during the crucial Ramadan period, according to a senior official.
This has already been made clear to the grouping of local dairy producers, the official added.
The increase in dairy prices averaging 10-12 per cent went into effect yesterday.
"In view of the start of the Holy Month of Ramadan, Union Co-op strongly believes that passing on a price hike at this stage will not be in the interests of our valued customers," said Khalid Al Falasi, assistant general manager.
"We have intimated to the dairy association that we will buy products at the higher prices, but will not pass them on to the consumer. We will stick to this stand right through Ramadan."
This decision could lead to Union Co-op absorbing losses of anywhere up to Dh1 million during the Ramadan period. All the other leading retailers have raised their selling prices.
The dairy association had been working on raising prices since April. According to them, the hikes are justified in the context of the higher production and transportation costs they have been bearing in recent months.
For instance, a three-litre bottle will now sell for Dh16 or so compared with Dh14, while the increase on a one-litre bottle is 50 fils.
But Union Co-op carries a lot of clout it is one of the biggest stockists of fresh produce, and sources up to 45 per cent of the overall volume of diary products in Dubai.
"We have got four mega stores opening shortly across Dubai in the near future, to add to the already strong network," said Al Falasi.
"Our fresh diary stock levels are more than adequate at this stage. Even otherwise, dairy suppliers will have to think twice before making any changes to our supply levels.
"Union Co-op is a big player, and we have to be seen as acting big to ensure the best deal possible for consumers."
Opinion is divided on whether the other leading retailers will be forced to follow suit by keeping the rise in sale prices of dairy products on hold during Ramadan.
"My forecast is that our main competition will analyse the situation and then will be forced to follow our action," said Al Falasi. "We will be looking to cream the market and the next few days are going to be very interesting."
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