Lulu signs food price cap deal
Dubai, April 6, 2008
The UAE Ministry of Economy on Sunday signed a Memoprandum of Understanding with Lulu Hypermarket Group to fix price of 32 basic commodities in a move, aimed at stabilising food prices.
Sultan bin Saeed Al Mansouri, UAE minister of economy; and Yousif Ali, chairman of Lulu Hypermarket Group signed the agreement at the Ministry of Economy (MoE) office in Dubai.
Under the agreement, Lulu Hypermarket will fix the prices of 32 basic food commodities at 2007 prices, which will apply to rice, sugar, oil, flour, tea, butter, salt, milk and its products, tomato paste, legumes, chicken, meat, cheese, egg, macaroni, water and bread.
The move aims to alleviate inflation, maintain market balance, and protect consumers besides completing a number of recent initiatives jointly conducted by the ministry in collaboration with Co-operative Societies; in line with the MoE’s call to fix the prices of basic food products at cost prices.
Al Mansouri praised Lulu for being the first private sector company in the country to implement the program.
“The initiative by Lulu Hypermarket to fix the prices of 32 food commodities emphasises the vital role that the private sector can play in contributing to price stability, maintaining market equilibrium and contributing effectively to the development of society and the national economy,” Al Mansouri said.
He also highlighted how the initiative underscored the social responsibility of the UAE’s private sector, under the directives and leadership of Sheikh Khalifa Bin Zayed Al Nahyan, president of the UAE; and Sheikh Mohammed Bin Rashid Al Maktoum, UAE vice president, prime minister and Dubai ruler.
Al Mansouri said that the ministry would continue to work in collaboration with other bodies to control monopoly, exploitation, and other threats to market stability.
"This is not the responsibility of the MoE alone, but a joint responsibility in which federal and local efforts integrate to eliminate any negative practices that may affect the consumer, society and the national economy," he added.
He also called for stronger co-operation between the public and private sectors in the country to address rising prices, particularly of basic commodities, which he noted "is an international phenomenon not limited to the UAE."
Yousif Ali said the Lulu group had responded quickly to the MoE’s initiative based on its conviction about the importance of such programs to eliminate any negative practices that threaten free competition in the UAE.
He further encouraged the private sector in the UAE to not focus solely on profits, pointing out the danger of inflation for both the society and the economy.
The MoU with Lulu Hypermarket Group comes only weeks after the MoE signed a similar agreement with the Union Cooperative Society in Dubai to preserve the 2007 prices of 16 basic food commodities.
Other co-operative societies responded to the MoE’s request to sell many of their goods at cost prices within the efforts to control price rises and curb inflation.-TradeArabia News Service