Business | Markets
Al Rawabi to hike product prices
Al Rawabi Dairy Company, a leading UAE milk and fruit juice producer, is increasing prices of its products despite an earlier price hike attempt being rebuffed by the Ministry of Economy.
- By Shakir Husain, Staff Reporter
- Published: 00:00 June 4, 2007
- Image Credit:
- The company cited increases in the costs of raw materials, packaging and transportation expenses for raising prices.
Dubai: Al Rawabi Dairy Company, a leading UAE milk and fruit juice producer, is increasing prices of its products despite an earlier price hike attempt being rebuffed by the Ministry of Economy in March.
In a notice sent to local retailers, the company hiked the prices across a range of its products from yoghurt to apple juice. The price of one litre of full-cream milk will go up by 50 fils to Dh5.50.
The company cited increases in the costs of raw materials, packaging and transportation expenses for raising prices.
"The hike in prices of almost all commodities worldwide has become normal and Al Rawabi is not an exception," the company argued in the letter dated May 31.
"No comment," Al Rawabi general manager Ahmad Al Tijani said when Gulf News sought his response to the price hike.
Being the market leader, Al Rawabi's decision is likely to be followed by similar price increases by some 10 dairy companies operating in the UAE market.
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The Consumer Protection Department of the UAE Ministry of Economy had warned major dairy companies of legal action earlier this year if they increased prices of their products.
It dismissed the attempts to increase prices of essential commodities as "harmful to consumers and the national economy."
A spokesman for Lu Lu Hypermarket chain said the group's stores will not adopt Al Rawabi's revised prices.
"We will stick to old prices until the price hike is approved by the Ministry of Economy," he said.
Economists fear rising prices of consumer goods will make it more difficult for the government to control inflation. Dairy companies insist they are justified in revising their product prices upwards due to increased cost of doing business.
The high cost of renting residential and commercial property is seen as a major cause of inflation.
Your comments
This raise in dairy products by Al Rawabi is going to affect the market negatively because other companies will do the same, causing a strain in the consumer's pocket.
Sandra
Dubai,UAE
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