04 Apr 2017

Increased inspections by the Commercial Compliance and Consumer Protection Department

Authored by: Hadef & Partners, Sector Groups

Increased inspections by the Commercial Compliance and Consumer Protection Department

Increased inspections by the Commercial Compliance and Consumer Protection Department

With Ramadan fast approaching, the UAE authorities’ campaigns to protect consumer rights through ensuring that retail outlets offer food products at reasonable and consistent prices, are likely to pick up pace. The Commercial Compliance and Consumer Protection Division of the Department of Economic Development (“CPD”) is tasked with conducting field visits to enhance awareness of consumer protection among consumers and merchants alike. During Ramadan, the subject of availability and the pricing of some 5,000 basic food items, such as rice, flour, oil, juice and milk, becomes the hot topic for the CPD. Prices of staple foods are set by the Ministry of Economy for Ramadan, and compliance often requires retailers to drop their prices, sometimes by up to 70%. Past reports have suggested that some outlets have historically failed to drop their prices for these foods, however increased inspections by the CPD are expected in the run up to, and during, Ramadan, to ensure that the expected higher demand for certain consumables is not exploited. Although the Ministry of Economy has not specified the penalty for food prices above those it sets, reports in previous years put potential fines for retailers at up to Dh20,000 for price violations.

Halal certification provides access to an enormous underserved market

A report by Euromonitor back in 2015 forecast that Muslims will make up more than 25% of the world’s population by 2030. The Economist put the global Islamic market worth at over $3.6 trillion in 2013, and estimated that the market would be worth over $5 trillion in just 3 years’ time. With more than 1 billion consumers underserved in the conventional marketplace, halal certification of products is fast becoming a commercial necessity for businesses, both in the Middle East and across the rest of the world.

Demand for products which are free of alcohol, pork and animal enzymes is growing globally, and there has been an influx of food ranges aimed not only at Muslim shoppers, but also a much wider consumer circle who perhaps prefer vegan, eco-conscious or cruelty free alternatives, which halal ranges could also cater to.

A number of companies in the UAE are applying for halal certification for their products to enable them to display the official halal logo. The UAE’s standardisation body, the Emirates Authority for Standardisation and Metrology (“ESMA”) is responsible for considering applications by businesses for certification, in accordance with various GSO and ISO standards. The certification process is procedural in nature, and ESMA may conduct audits of premises and processes to ensure that minimum requirements under the GCC wide, as well as international, standards for certification are met.

Halal certification is a highly regulated subject, however the commercial gains in accessing consumers eager to purchase goods that suit their particular lifestyle could be huge for businesses. We can help in preparing your business for navigating the legal framework to accreditation.

For more information, please contact us on sectors@hadefpartners.com