Union Co-operative Society, a hypermarket chain, has reduced the prices of 30 basic items by at least 25 per cent from the purchase price, in celebration of Ramadan, said a report.

The chain which runs seven outlets in Dubai, has set aside Dh10 million ($2.7 million) to make up for the loss due to the price cuts on major food items including rice, oil, milk, flour, water and chicken, according to a Gulf News report.

Union's Ramadan budget for 2008 is five times more than its last year's budget of Dh1.9 million.

The company said the price cuts were in response to the Ministry of Economy's recent move to monitor food price hikes during Ramadan.

Other policies adoped by Union to keep prices under control, include a direct import policy to avoid brokers and sub agents, and to go for alternative product lines taking into account, nominal prices and good quality.

Union had earlier responded to the government's directive to keep the prices of 16 main food items down, to reduce the impact of UAE's inflation on the consumers.