Sunday, February 25, 2007

Price controls spread on bread :: Khaleej Times

Yesterday it was Ras Al Khaimah (item 2). Today it's Ajman that wants to control the price of bread:
The Ajman Municipality has ordered that all bakery owners in the emirate, who hiked the price of bread recently without its prior approval, should revert back to the earlier retail price.

The Ajman Municipality has also intensified its market price control campaign following the recent price hike of ‘Samoon’ bread in particular, a popular bread variety consumed by a large majority of Arab nationals.

The bakeries have raised the price of samoon bread and other bakery items from 25 fils to a dirham. Earlier, a pack of six samoon bread was sold at 75 fils, but now the price at most bakeries ranges from Dh1.25 to Dh1.50 per pack.

Bakery owners say they have raised the prices of their products, including samoon bread, due to a hike in the price of various ingredients such as flour, wheat, milk, butter, etc. A public notice regarding this hike in price was recently issued by most bakeries in Arabic, English and Urdu.
Meanwhile, Sawsan Al Tayeb, a housewife said she has noticed that those which have not increased their price have reduced the size of their loaves of bread, or reduced the number of pieces per pack.
Since there are no shortages reported, and the increase in price (or, equivalently, decrease in package weight) is widespread, it appears the municipalities have not been successful in enforcing the controls.

Talk, no action. In this case that's a good thing. What is not a good thing is the inflationary environment in the UAE, particularly because prices are growing faster than wages. Those are not problems, though, that are solved by price controls.

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