Ministry turns down bid to raise Nido prices by 15 per cent

Abu Dhabi: The consumer protection department at the Ministry of Economy rejected on Sunday an application by Nestle to increase the price of “Nido'' powder milk by 15 per cent, rendering the request as unjustifiable.

“The ministry refutes consumer exploitation practices resulting in any damage, and emphasises the application of the decree issued on March 15 by the executive sub-committee assigned by the higher committee for consumer protection, prohibiting any price increase for the Nido product that exceeds 5 per cent,'' the department said in a statement.

“Nestle is requesting a price increase of 10 to 15 per cent for the product, after we had already granted permission for a 5 per cent increase in March, and accordingly the ministry requested the data justifying such request which we deem in violation of the sub-committee's decree,'' Dr. Hashem Al Noeimi, director of the consumer protection department told Gulf News yesterday.

“When we receive the data, it will be forwarded to the higher committee to determine whether the company is to be granted the permission,'' he added.

However, the department revealed a tough stance in order to protect consumer from any attempts of exploitation. “The ministry will severely react according to the law against any violations,'' the statement said.

Increasing pressure from the dollar peg is adding to manufacturers' and importers' woes, while retailers are increasing shelf space charges due to the increasing rentals in the property market.

“The argument for currencies' appreciation against the dollar can only be valid when the product is not denominated in dollars,'' commented Geyas Gokkent, head of research at the National Bank of Abu Dhabi.

For Nestle's request to become viable, the ministry needs to appreciate the arguments provided by the company, according to Dr. Al Noeimi.

The case is more straight forward when the item in question is a single product or raw material, according to Gokkent who explained that “in the case of Nestle, we have a European-based producer of a wide variety of products, and if they can prove that they need to import raw material from Europe to produce the item, their argument might be then taken into consideration.''