They have asked the Supreme Economic Council to intervene to put an end to this unjustified hike as Ramadan is approaching.
The wholesale traders and retailers exploit the annual event to raise the prices of dairy products without any justification, Al-Riyadh newspaper reported on Sunday. It said its attempt to contact the Ministry of Commerce during the past few days to obtain explanations for the increase in milk prices had failed.
The newspaper, however, quoted Abdul Rahman Al-Zouman, economic adviser and member of the Global Association of Risk Professionals as describing dairy companies’ move to up prices without warnings as a grave challenge to the efforts of the government to keep prices of the basic commodities stabilized.
“Such practices will have a negative impact on the prices of all commodities, especially with the advent of Ramadan,” he said.
Al-Zouman said the dairy companies should have reduced their prices instead of increasing them because of the large profits they have made benefiting from the subsidy of the government on basic commodities in order to make them handy to the consumers.
“The government provides dairy firms with interest-free loans, free pieces of land, custom exemptions, open recruitment visas and other services so as to make their prices affordable to the consumers. Despite that, these companies have increased their prices to unreasonable limits,” he said.
Al-Zouman recalled that in 2008, the dairy companies constituted a monopoly consortium that increased milk prices overnight by 33 percent, refusing to listen to the requests of the commerce minister to reduce prices. “That step influenced the prices of other basic commodities, with many companies raising their prices without any justification,” he said.
Al-Zouman asked the Supreme Economic Council to step in to stop these unfair practices by dairy companies and to exclude any company that increases its prices from the government facilities. “The Commerce Ministry should impose fines on dairy companies that increase their prices,” he added.
According to the economic expert, an increase of seven percent in milk prices would make dairy companies achieve annual profits of about SR500 million. “These companies make profits worth about 50 percent of their capital, but they are still not content,” he said. Al-Zouman also asked the ministry to carry out surprise inspections at the market to make sure that prices are stable, especially in view of Ramadan being only a few days away. “Companies, importers and manufacturers should be closely watched so as not to increase prices,” he said.
