Abu Dhabi and Dubai: A hefty hike in the prices of dairy products and juice has consumers on edge and the UAE Cabinet irritated.

The Consumer Cooperatives Union (CCU) stopped retailing dairy products as of yesterday in protest against the recent price hike, but many supermarkets and grocers have raised prices.

"The CCU decided not to accept the hike in prices of dairy products as it is unjustified and therefore all the cooperative societies will not sell these products," a spokesman of CCU told Gulf News. "The decision has been taken in the interests of consumers."

However, a manager at a Choithram supermarket which implemented the price increase said: "Customers are already flocking from the nearby Union Cooperative, where there is no milk on the shelves."

Prices of dairy products and juice went up by 2 to 10 per cent from Sunday, following a directive from the UAE Juice and Dairy Producers Group a move that the UAE Cabinet called "monopolistic" during their regular meeting yesterday. The cabinet also instructed the ministries of Finance and Economy to address the issue.

It isn't just pocketbooks where the price hikes could hit.

Expats, who come to the UAE looking for a higher standard of living, while being able to save money, may get discouraged by the increased cost of living and move, according to Adrian Jonklaas, a senior research analyst with GRMC Group.

Already Donna Legault, who works in the athletic department at The American School in Dubai, is thinking twice about staying in Dubai.

"I am thinking about moving back to New York because food here is double the price it is back home," she said, while browsing through the dairy section at Choithram. "In fact, everything here has become more expensive."

With consumers watching their bottom line more closely, local producers may face increased competion from other Gulf companies, especially those from Saudi, said Dina Karam, a senior research executive for Reach Mass.

"Dairy prices are sensitive consumers go for the best price," she said, adding that Saudi companies such as Safi Danon already have large market share in the UAE.

The CCU spokesman said the hike in dairy products prices is the second in less than 12 months.

"Such hikes are unjustified. If you compare prices of dairy products in the UAE with Saudi Arabia or Oman, it is costlier by at least 50 per cent here. Such hikes are arbitrary leading to inflationary pressures," he said.

The hikes are due to an increase in the imported materials involved in packaging products, said Ahmad Al Tijani, general manager for the Al Rawabi Dairy Company.

"We have only two choices, either to increase the prices of dairy products or to decrease the costs. But the latter will affect the quality of products," said Tigani, who is also the chaiman of the UAE Dairy and Juices Association.

The association said in a statement that price of plastic and feed also shot up by 18 and 20 per cent respectively, excaberated by an increase in oil surcharges.

Najah Al Hamad, a housewife shopping at the Samood Grocery in Abu Dhabi said she didn't care why the prices increased it still was a shock to her family budget.

"Dairy products are essential items and consumed on a daily basis. Even a small increase leaves a big hole in our pocket. Such hikes should be discouraged," she said.