Ministry of Economy to control food costs

Analysts warn that global conditions could lead to an erosion in the quality of food on market shelves while consumers are urged to eat less.

ABU DHABI // The Ministry of Economy will absorb some local food costs through a partnership with suppliers, part of a broader effort to deal with an increase in prices that has triggered riots in other countries.

Meanwhile, local food experts warn that the quality and availability of food could be compromised by the UAE's heavy reliance on imports. About 85 per cent of the country's food comes from abroad at an annual cost of Dh11bn.

"The government is trying," said Juma Bilal Fairouz, the chairman of the board for the independent UAE Consumer Protection Society based in Sharjah, "but a global free market is a free market, and people could suffer so some may see profits at the end of the day."

The ministry recently rejected requests from bakeries to increase the price of bread and has secured commitments from 30 food suppliers to slash prices on basic commodities such as rice, poultry and dairy products for the month of March. It is not clear whether the discounts will remain in place after that period.

"We will continue to monitor the market and give strategic price reductions," said Dr Hashim al Nuaimi, director general of the ministry's consumer protection department.

The ministry also plans to put in place this year an electronic tracking system to monitor the daily prices of 200 basic foodstuffs.

An amendment to consumer protection laws, passed by the Federal National Council this month and now awaiting presidential approval, would penalise companies that unfairly raise prices.

Bad weather, growing demand and political instability in some parts of the world have driven up the price of staple foods, and experts predict the market will remain volatile for the foreseeable future. Surveys conducted by The National this month found that the prices of basic items at three of the capital's main supermarkets - Carrefour, Lulu and the Abu Dhabi Co-operative Society - have surged during the past 18 months.

Hamad al Midfa, a Federal National Council member from Sharjah, questions the ministry's initiatives and suggests there are other factors to be considered.

"They are doing their best, however their best is not enough," he said. "There are things locally here to address, such as how the floods and crises affect other commodities being imported, how the cost of petrol or diesel reflects on recent food prices, and even how raising rents for warehouses and offices reflects on their products."

A shortage of food is likely to mean lower-quality produce in supermarkets, said Sven Mostegl, a food consultant based in the capital. When there is pressure on profits, unscrupulous traders will often re-label frozen and dry foods numerous times to extend the expiry date, he said.

"Everyone, small and large companies, will do their best to survive, but quality of food on the shelves will be destroyed in the process," he said.

Dr Juma Bilal Fairouz, head of the UAE Consumer Protection Society, said government subsidies were the best way to guard against soaring prices and sudden shortages. Meanwhile, families and individuals should do their part by eating less, he said.

"I used to drink a glass of pomegranate juice every day, but now I only drink a third of a glass so that it will last a few days longer," he said. "Everyone has to make sacrifices to keep the market affordable, otherwise, there is no solution."