[picapp align=”left” wrap=”true” link=”term=grocery+shopping&iid=5210525″ src=”http://view1.picapp.com/pictures.photo/image/5210525/products-shelves/products-shelves.jpg?size=500&imageId=5210525″ width=”234″ height=”311″ /]Few days to Ramadan and the consumerism carnival has already started. Consumers, retailers, and the Ministry of Commerce and its monitoring bodies are the usual triangle sides of the price hiking struggle and debate; who did what to whom!!
One of the strangest analyses that popped out this year came from ‘an official’ at Jeddah Chamber of Commerce and Industry (JCCI) according to Arab News (here) The manager of the Corporate Social Responsibility at the JCCI is saying that the consumers themselves are the problem of any prices hikes because, those bad consumers, have brand loyalty!!!! He is also adding that there is no need for any prices monitoring systems, and assures us all that the Saudi market is one of the most open markets in the world, even more open than the West!!
I am not sure how Mr. Official understands the concepts of brand loyalty, consumer protection, and open markets but here are some comments:
- When consumers trust a brand and develop some kind of attachment to it, then it should be their own choice to continue with it or not if the brand owner decided to increase the price for any reasons (e.g. manufacturing costs, new features, raw materials cost, etc). But when the prices increase not because of the brand owner but because of other factors in the local supply or distribution chains, then whose responsibility is this? And even more, what if the brand owner is a local who takes advantages of different seasons to increase prices without any reasonable justifications, whose responsibility is this?
- There are no contradictions whatsoever between free markets and consumer protection activities. Not only that, I can take it a step further and argue that, consumer protection groups are major signs of a truly free market!
- Prices monitoring is one of many responsibilities of consumer protection groups. Quality checks, fighting monopolies, be the channel of communication between the customers and other governmental bodies are all examples of such activities. Again, how all these activities contradicts free and open markets??
Ramadan's Prices Hikes « An Eye on Saudi Blog…
I found your entry interesting do I’ve added a Trackback to it on my weblog :)…
This post is very interesting as we are getting into Ramadan.
Also I wanted to know your reaction to the proposed ban on blackberry services in KSA and other GCC countries. Do you think the concerns raised by authorities is for real or its a ploy to allow for censorship.
Hello there … I’ve written two posts already on the Blackberry story in Saudi. You can search the blog for them.
All in all, there is something fishy in the whole story. The problem with CITC that it feels that it is above questioning and does not like to discuss its activities or make them clear to anyone!
To what extent should the government overrule the laws of supply and demand? Unless the Kingdom wants to move to pure price controls across the board (a very bad plan), the issue can’t be whether or not prices go up – but only whether the parties selling the products colluded on fixing the prices (and whether the Ministry itself cooperated with the price hike by, e.g., refusing to license competing products, or whether Customs inadvertently colluded by, e.g., blocking legitimate shipments).
Hello there Anon,
Nice points you have mentioned. I agree with you that it is a bad plan to have a state controlling prices, but that does not come into clash with protecting customers from prices hikes when they are not justified.
The point about regulators contributing or cooperating in prices hikes is another reason consumer protection entities are needed in a free market!
kol 3am we enta be 5eer :))
Thanks Mohamed 🙂
Hi Saad,
We are an English class at the Unversity of Dammam. We like your blog. It’s very interesting and useful, but we don’t understand all of the vocabulary that you use.
Keep writing your blog and we will continue to read it and use it to learn more English.
Thank you very much
Group 11
🙂
I am not sure if this is meant to be a complement … I would consider it as one!