Poorest Lebanese hit by Ramadan price hikes
Government pledges to increase consumer safeguards as holy-month food expenses soar

By Dana Halawi, Daily Star
Ramadan this year has been not so joyous an occasion for those in Lebanon already  coping with unemployment and harsh living conditions, whose woes have been exacerbated by an unprecedented hike in food prices during the holy month. Iman, a 42-year-old widow, has been working for three years as a secretary in a computer shop in the morning and as a waitress in one of the well known restaurants in Beirut at night to be able to provide her two children with three respectable meals a day.

“All countries around the world respect their national and religious festive celebrations and reduce prices, announce clearance sales and help everyone to make purchases, but in Lebanon it is different,” said Iman. “The prices of commodities keep rising all the time, I used to buy 1kilogram of rice for LL2,000 a year ago but today it is sold for LL5,000,” she complained.

“How am I supposed to provide my kids with the complete nutrients when prices of sheep meat rose to LL22,000 per-kilogram after I used to buy it for LL14,000,” she added.

Iman said the prices of fruit, such as grapes which she used to buy at LL750 a kilogram but reached LL3,000 per kilogram, had more than doubled

Iman’s complaints were not supported by Fakhani, a food retailer with many shops across Lebanon who noted that prices of vegetables increased by 50 percent during the first week of Ramadan but went down again after 4 days.

He said that dairy-product prices had increased but refused to acknowledge a rise in the prices of other products.

Iman is only one example among the 300,000 Lebanese people living under the poverty line who are unable to meet their most basic needs, according to statistics provided by the United Nations.

Lebanese experts raised concerns about the tragic situation of Lebanese families not being able to cope with the high cost of living, and proposed some solutions that might relieve people’s suffering if adopted.

Zouhair Berro, head of the consumers’ protection association, said that the price of commodities started to rise in 2006 and witnessed a slight decrease in the last quarter of 2008 but rose again in 2009.

“Commodities prices usually increase in the first week of Ramadan and then go down in the second week, like in 2008, but this year prices remained high even during the last week of the holy month – except for vegetables and chicken,” he said.

According to the statistics of the consumers’ protection association, the main commodities which showed an increase in their prices during Ramadan (compared to previous months)  included mutton (27.5 percent), beef (11 percent), chicken (20 percent), milk products (30 percent), oil (20 percent) and vegetables (100 percent).

“We do not expect these prices to go down again after Ramadan because of the absence of policies that are aimed at controlling prices,” said Berro.

He believes that the delay in the formation of the cabinet helped some of the traders to take advantage of the situation and increase their prices because of the absence of proper control by the government.

“Prices of meat have increased in the entire region, especially as a result of the increase in prices of meat coming from Syria, but other commodities have increased because of the lack of control by the government,” he said.

Berro said that it was very normal to witness an increase in prices all the time because 70 percent of the Lebanese economy is dominated by monopolies.

“We do not expect prices to go down in the near future even with a local decrease in demand and consumption, because of the power exerted by monopolies in some sectors to control prices,” he added.

Berro’s points of views were also echoed by Ghassan Ghosn, president of the Lebanese general workers union,  who said that the Lebanese market is dominated by exclusive dealerships where traders tend to buy products from farmers by paying the lowest prices.

“They very often hide these products for better and more expensive seasons to come [so they can] benefit from the highest possible profit,” he said.

“Why won’t the government cancel exclusive dealership since this is supposed to be one of the conditions for our entrance to the World Trade Organization (WTO)?” he asked.

Ghosn said that the general workers union opposed Lebanon’s fast entrance to the WTO as long as the anti-dumping law and the law of local production protection are not properly implemented.

“It is also necessary to ratify a law [which imposes] additional fees on imports for us to protect our local production, in addition to decreasing its cost to be able to compete worldwide,” he said.

Dumping occurs when a non-Lebanese firm sells its product in Lebanon for less than it sells it in its own country, in order to gain market share or undermine an existing or emerging industry in Lebanon.

The Law on Anti-dumping, Countervailing and Safeguard Measures was ratified by Parliament in October 2006 and was later enacted. The law is among the conditions stipulated for WTO conformity and is on the agenda of the Economy and Trade Ministry.

Ghosn believes that the government’s policies of free competition and market forces determining prices of commodities would work very well in a country with clear and well-implemented laws and regulations, but not in the case of Lebanon.

“Countries which have entered the WTO have low costs of production as well as successful agriculture and manufacturing industries, which is not the case [here],” he said.

He said that the government should provide the Agriculture Ministry with a budget to improve the sector. “The prices of materials used in agriculture are very expensive in Lebanon and farmers should be supported for them to be able to compete with outside markets.” This would also lower prices at home, he added.

According to the Lebanon economic report by Bank Audi, Lebanon’s agricultural exports amounted to $69 million in the first half of 2009, up by 4.5 percent relative to the same period of 2008.

However, it added that weaknesses of the sector included cheaper imported produce from neighboring countries, favored by an even lower cost of labor and much wider agricultural areas; shrinking sales of local goods; the lack of efficient government incentives to overhaul the sector and support farmers; and the lack of price control and consumer protectionism.

The report added that the WTO accession would add to the sector’s challenges by increasing competition on the local market, while longer periods of droughts, especially in summer months, and the extreme temperatures in general could pose a threat to the sector and have an adverse impact on the quality of the crops and harvest.

Ghosn also said that there should be an agricultural calendar to protect the local production during certain seasons.

He criticized the lack of government control regarding the price of imported goods, which was not completely denied by the acting general of the of Economy and Trade Ministry Fouad Fleifel, who said: “The consumers’ protection directorate controls the prices, quality and expiry dates of a small quantity of imported commodities that enter Lebanon through the ministry. This does not include a lot of products special for Ramadan.”

He added that most of the imported products come from Arab countries which also see prices rise during Ramadan. This in turn leads to a hike in prices in Lebanon.

Fleifel noted that the quantity of imported products increased in 2009  – driven by high demand during Ramadan, and  the increasing number of tourists in Lebanon at that time –  which negatively affected the slide in prices. However, he added, it is normal to witness a decrease in prices after the end of this month because of the regression in demand and the increase in competition between traders and importers.

Bank Audi’s Lebanon economic report states that imports amounted to $7.831 billion in the first half of 2009, up by 7.1 percent from the first half of 2008. It said that the number of ships at the Port of Beirut totaled 1,200 in the first half of 2009, up by 17.5 percent as compared to 2008’s same period.

Fleifel said that the Directorate of Consumers’ Protection (DCP) had very modest capabilities in the first week of Ramadan but had employed 70 additional inspectors who were showing a “positive” results by the second week of the holy month.

He said that market prices in Lebanon were determined by supply and demand movements. Since most of the commodities available in Lebanon are imported, traders tend to take advantage of the situation and increase their prices under the pretext of importing these commodities at high prices.

Fleifel said that the Economy and Trade Ministry was planning to modify the law of consumers’ protection in addition to increasing the number of employees in the DCP in order to meet the huge responsibilities.

He added that the ministry was making sure that traders giving consumers the exact weight registered on products. However, Ibrahim Harb, a constant shopper, said that some of the tricks come from manufacturers who cut down the weight of their products and sell them at the same prices.

“I used to buy a 1 kilogram pack of Ghandour biscuits for LL3,000 but now I buy the 800 gram for the same amount,” he said. He added that even a basic necessity such as bread, is sold at LL1,500 for the 1,100gram while they used to charge the same price for 1,500g.