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Merchants again hike prices of basic food products as Ramadan arrives

BEIRUT: Throughout the Middle East the onset of the Muslim holy month of Ramadan results in rises in the price of basic food products.

In Lebanon prices of fruit and vegetables are primarily affected, followed by rice, oil, cheese and labneh. Merchants often attribute such inflation to increases in demand that correspondingly result in decreases in supply.

Last year price increases on certain fruit and vegetable items were dramatic. Lettuce prices were reported to have increased by 100 percent, from LL750 to LL1,500. Potato prices shot up from LL350 per kilogram to around LL1,000, with tomatoes also seeing a similar price increase. Overall fruit prices rose by up to 70 percent.

“The merchants say it is due to supply and demand,” observes Mohammad Darwish, secretary-general of consumer protection group Consumers Lebanon. “We say it is due to the greed of the merchants who take advantage of this holy month knowing that there are certain essentials (and ingredients used in traditional Ramadan dishes) such as sweets and fattouch that Muslims cannot go without.”

“Why is it only in Ramadan that diseases hit the vegetable harvests, or prices soar worldwide?” Darwish continues, pointing out that inflation on basic food items, albeit less extreme, also occur during Christian times of fasting such as Lent.

Darwish is critical of what he sees as a lack of effort on behalf of the Lebanese government to curtail the practice of price hiking during Ramadan, claiming that this failure indicates that the government is supporting the merchants more than the consumers.

He claims that merchants’ profits from hiked prices can reach up to 300 percent, observing that that the poor and middle classes are the groups most affected by this phenomenon.

In particular, he points to the government’s failure to implement a decree (1/270) issued in the 1970s that places an 8 percent profit limit on essential products.

“The government should implement the laws and decrees issued in this regard and carry out more inspections,” says Darwish. “The number of fines the ministry handed out in 2011 was ridiculous considering how widespread the problem is.”

“We all remember the spoiled meat issue which shocked the public,” says Darwish, referring to the discovery of 300 tons of expired, inedible meat discovered by authorities in warehouses across the country earlier this year.

“It proves the dereliction of the government in implementing laws and measures,” he adds.

Economy and Trade Minister Nicolas Nahas claims that the ministry’s database does not reveal drastic increases in prices over the month of Ramadan. Last year 215 surveyors were dispatched to the marketplace in order to crack down on transgressors, with violations then reported to the Attorney General.

Nahas points out that regular surveys on the prices of 55 everyday food items are additionally carried out to check for irregularities in prices.

“If we receive information regarding drastic price hikes then we take action immediately,” says Nahas. “We can issue a fine, send the offender to court, and seize access to their accounts.”

In response to the question of why decree 1/270 has not been implemented, Nahas is less forthright.

“There is no way to implement it in 200,000 different locations across the country. We implement it in response to complaints. If an issue has been raised,” says Nahas.

“We don’t have the tools or resources to audit all the accounts of all the shops in the country.”

Darwish does not express any optimism regarding government measures to curtail price hiking.

“We expect that the inflation will be as bad as last year if not worse.”

 
A version of this article appeared in the print edition of The Daily Star on July 21, 2012, on page 4.

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