Government to crack down on arbitrary price increases

Dubai: The UAE government will take tough action against retailers found engaging in price manipulation or hiking the prices of products or services without prior permission from the Ministry of Economy, a senior official has said.

Dr Hashim Saeed Al Nuaimi, director-general of the Consumer Protection Department in the Ministry of Economy, said the ministry will not hesitate to act against errant companies.

The Ministry of Economy recently slapped a leading gas supply company in Abu Dhabi with a Dh100,000 fine after it hiked gas prices from Dh6.5 to Dh14 per cubic metres without obtaining the approval of the Higher Committee of Consumer Protection at the ministry.

The ministry warned other gas companies against increasing their prices without obtaining the necessary approval.

Al Nuaimi encouraged consumers to refrain from signing agreements which contain clauses reserving the right of suppliers to increase the prices of their services or products without prior notification.

"Suppliers, traders or services providers are not allowed to increase their prices whenever they want unless they [can] justify the reason [behind the] increase to get an approval from the ministry," Al Nuaimi said.

The Ministry of Economy will impose hefty fines if retailers are found increasing or manipulating prices in violation of the rules, Al Nuaimi said. The fines will range from Dh5,000 to Dh100,000.

Al Nuaimi said the ministry had fined 20 suppliers and traders from the beginning of the year for increasing their prices without the necessary approval — with the total amount of fines amounting to Dh2 million.

"The Ministry of Economy has hired special teams to monitor prices [across] the country [with the] cooperation of local departments," Al Nuaimi said.

"Follow-ups will be on a daily basis through visits to retail outlets to make sure that all outlets are compliant," he added.

In case of violations, penalties are imposed on the trader in accordance with the Consumer Protection Law, he added.

As part of precautionary measures, the ministry has set up hotlines nationwide to help consumers file complaints about increases in prices. The number of inspections will also be raised.

Barcode system

Meanwhile, a new barcode system will be introduced in stores and supermarkets to prevent retailers from raising prices, Al Nuaimi said.

He added that the barcodes would link Dubai Customs to his department. This will allow officials to check the quantity of a particular product being brought into the country, the process of its sale and whether there is a shortage.

The system will monitor 650 commodity prices daily, of which 15 essential products are subject to price caps.

These include rice, wheat, sugar, flour, milk, tea, chicken, meat, oil, bread, eggs and bottled water.

"Merchants and retailers will not be able to raise prices to profit at the expense of consumers once the electronic monitoring system is in place," Al Nuaimi said.

The electronic monitoring system will be implemented in collaboration with cooperative societies and major retail outlets, including Spinneys, Carrefour, LuLu Hypermarket and Choithrams, which together account for 80 per cent of the retail market.