Business | Markets
Carrefour freezes prices of essentials
MAF Hypermarkets, the franchisee of Carrefour, the world's second biggest retail chain, has pledged to fix the prices of 52 food commodities and sell them at 2007 levels throughout 2008, in line with Ministry of Economy's plans to stabilise prices and reduce inflation in the region.
- By Suzanne Fenton, Staff Reporter
- Published: 14:15 April 17, 2008
Dubai: MAF Hypermarkets, the franchisee of Carrefour, the world's second biggest retail chain, has pledged to fix the prices of 52 food commodities and sell them at 2007 levels throughout 2008, in line with Ministry of Economy's plans to stabilise prices and reduce inflation in the region.
Carrefour is the third-largest retailer in the UAE to join the initiative after Union Co-operative Society and the Emke Group that operates the LuLu Hypermarket chain.
The move is expected to rein in food-related inflation, which has been estimated to jump 30-40 per cent this year.
Efforts
"The signing of the Memorandum of Understanding (MoU) with Carrefour is in line with the continuous efforts by the Ministry to stabilise prices, reduce inflation levels, maintain market balance and protect the consumer," Mohammad Bin Abdul Aziz Al Shihhi, Undersecretary at the Ministry, said.
Al Shihhi also said that it was part of a series of Ministry initiatives that aim to encourage private sector companies and co-operatives to fix prices of basic foodstuff. "It's a very competitive market. If major hypermarkets have competitive prices, others will have to follow suit," he said.
Henry Changeux, senior vice-president of Carrefour said the MoU would be come into effect from Sunday, April 20.
Under the terms of the agreement, Carrefour will fix prices of 52 basic foodstuffs at 2007 levels.
These goods include four kinds of rice, with a five-kg bag of basmati rice costing Dh18.75 and a 10-kg bag at Dh37.50.
Other items under the MoU include three types of eggs, three types of milk, four types of frozen chicken, 10 types of fresh chicken, one type of bread, two types of meat, two types of tomato paste, three types of sugar, one type of salt, two types of vegetable oil, six types of pasta, three types of beans, two types of tea, two types of water and four types of flour.
Al Shihhi emphasised that the government "will not subsidise anything".
He said the initiative highlights the social responsibility of the private sector and that forming monopolies in the market negatively influences the UAE's principle of a free economy.
"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," said Al Shihhi.
The government has now established agencies for 16 basic food items as a strategy to eliminate monopoly and to control prices.
Discussion
The UAE is expected to raise the issue of rice export ban when Indian Commerce Minister Kamal Nath visits the UAE soon.
Al Shihhi said that Minister of Commerce of India will be visiting the country shortly to discuss the flexibility of rice imports to the UAE.
Have your say
What do you think of this initiative? What other items would you like to see have their prices reduced? Tell us at letter2editor@gulfnews.com or fill in the form below to send us your comments.
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