Sunday, February 28, 2016

Does Almarai has Monopoly in dairy industry of Saudi Arabia?

Every few moments there are campaigns which are launched with the sole purpose of destroying or marring the local companies of the region. Each and every consumer has the complete right to object, reject or boycott any product which might have increased in price. The problem however rises when these derogatory campaigns label these companies as taking advantage of the consumers, being monopolies or being extremely greedy.

The extremely subjective statement is obviously untrue due to the fact that the company cannot legally monopolize any product. We can take a local campaign launched in the Kingdom which called for the products of Al Safi dairy and Al Marai products due to their increase in price. The reason given for the boycott was that the companies have complete monopoly over the market. The world Monopoly is used so lightly that I feel it must be defined. In accordance to the experts, monopoly means when any merchant hoards certain products during their shortage in the market and then slowly sells it at a higher price for added profits. There is another version which classified monopolizing of products by not selling when the prices are low and creating shortage to sell at higher price.

In accordance to these definitions, there is no way that Al Safi and Al Marai have been monopolizing the market because they simply cannot do it legally neither do they have the means necessary. With the wide range of products available in every category, there never can be a single company in monopoly. Talking about the increase in prices, we must realize that an increase in price in any business is a tough one and a lot of thought and effort has gone into evaluating whether the price actually needs to be raised. An increase in prices can drive down the revenue of any company because customers are attracted to other products which have lower prices.

It must be realized that the local companies in the Kingdom of Saudi Arabia which are employing several thousands of Saudi and Non Saudi employees who also reside in the Kingdom. These companies significantly add on to the economy of the Kingdom. They provide food for the people of Saudi Arabia and in some cases for the whole world which in turn promotes the products of the Kingdom in other foreign countries. We must have complete faith in the Ministries and authorities charged with monitoring activities of these companies and we must believe that they will efficiently do their job. When any violation happens our authorities tackle them head on, and we have witnessed this too.

All subsidies given by the government are for the benefit of the citizens and residents of the Kingdom. The continued flourishing of food companies is vital to the people of the Kingdom, hence I wonder why are some people adamant on destroying the image and availability of different products for the people.

Source: Saudi Gazette

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  4. Who is responsible for significant increase in real estate prices?
  5. The customer is always right, if he is wrong, refer to Rule #1


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