Rachel Ray/Dunkin’ Donuts and a scarf

Once upon a time (last year) in a land not so far away for some (America), the popular American retailer Urban Outfitter sold a fashionable checkered scarf — and the buyers, they came.  From New York to Los Angeles and in many cities in between, youngsters wore this scarf as it made them… well… trendy.  That is, until someone likened their fashion statement to a certain person (Yasser Arafat) associated with terrorism. Ever so quickly, that fad was gone.

Today, Dunkin Donuts finds itself in a similar controversy… and if I may say, it’s a bit absurd.  The checkered scarf which has come to be associated with Yasser Arafat and the Fatah movement has long been used by the Arabian bedouins to keep the sand out of their eyes!  I understand people’s apprehensions, but it is really going overboard… it’s just sad.

Boston Globe
May 27, 2008

Dunkin’ Donuts yanks Rachael Ray ad

Does Dunkin’ Donuts really think its customers could mistake Rachael Ray 
for a terrorist sympathizer? The Canton-based company has abruptly 
canceled an ad in which the domestic diva wears a scarf that looks like a 
keffiyeh, a traditional headdress worn by Arab men.
more stories like this

Some observers, including ultra-conservative Fox News commentator Michelle 
Malkin, were so incensed by the ad that there was even talk of a Dunkin’ 
Donuts boycott.

??The keffiyeh, for the clueless, is the traditional scarf of Arab men 
that has come to symbolize murderous Palestinian jihad,” Malkin yowls in 
her syndicated column.

??Popularized by Yasser Arafat and a regular adornment of Muslim 
terrorists appearing in beheading and hostage-taking videos, the apparel 
has been mainstreamed by both ignorant and not-so-ignorant fashion 
designers, celebrities, and left-wing icons.”

The company at first pooh-poohed the complaints, claiming the 
black-and-white wrap was not a keffiyeh. But the right-wing drumbeat on 
the blogosphere continued and by yesterday, Dunkin’ Donuts decided it’d be 
easier just to yank the ad.

Said the suits in a statement: ??In a recent online ad, Rachael Ray is 
wearing a black-and-white silk scarf with a paisley design. It was 
selected by her stylist for the advertising shoot. Absolutely no symbolism 
was intended. However, given the possibility of misperception, we are no 
longer using the commercial.’ ‘

(In case you’re wondering, the stylist who selected the offending scarf 
was not Gretta Enterprises boss Gretchen Monahan, who appears on Ray’s TV 
show as a style consultant.)

For her part, Malkin was pleased with Dunkin’s response: ??It’s refreshing 
to see an American company show sensitivity to the concerns of Americans 
opposed to Islamic jihad and its apologists.’ ‘

Egyptian archaeologists find fortified city

An Egyptian archaeological mission in northern Sinai, headed by Dr. Mohamed Abdel-Maqsoud, head of antiquities of Lower Egypt, has found the remains of the largest ancient Egyptian fortified city from the New Kingdom. Egypt’s Minister of Culture Farouk Hosni announced the discovery, which took place within the framework of a joint project of the Ministry of Culture and the Supreme Council of Antiquities (SCA) to explore the ancient military road known as the “Way of Horus,” which once connected Egypt to Palestine.

Dr. Zahi Hawass, Secretary-General of the SCA, said that the mission has found a relief of king Thutmose II (1516-1504 BC). This relief is thought to be the first such royal monument to be found in Sinai, and indicates that Thutmose II may have built a fort in the area.  

Dr. Hawass added that the mission has also unearthed remains of a mud brick fort with a number of 4-meter-high towers. The fort measures 500 by 250 meters in area, and can be dated to the reign of King Ramses II (1304-1237 BC). Early studies suggest that this fort was Egypt’s military headquarters from the New Kingdom (1569-1081 BC) until the Ptolemaic era (305-31 AD).  

Dr. Abdel-Maqsoud said that the first ever New Kingdom temple to be found in northern Sinai has been located, and early studies indicate that it was built on top of an 18^th dynasty fort. The mission also unearthed a collection of reliefs belonging to kings Ramses II and Seti I, along with rows of storehouses used by the ancient Egyptians to store wheat and weapons.   

ALSO FROM THE COUNCIL TODAY:

A bronze statue of the goddess Aphrodite, a headless Ptolemaic royal statue, an alabaster head of Queen Cleopatra, and a mask thought to be of her lover Mark Antony have been discovered by an Egyptian-Dominican team headed by Dr. Zahi Hawass, Secretary- General of the Supreme Council Antiquities (SCA) at the archaeological site of Taposiris Magna at Abusir, 45 km north of Alexandria. 

Egypt’s Minister of Culture Farouk Hosni made the announcement yesterday.

Dr. Hawass said that inside the temple of Taposiris Magna, a number of tunnels 50 meters in depth were found, along with corridors and the foundation stones of the temple, which revealed that the structure was built during the reign of king Ptolemy II (282-246 BC). He noted that the shafts and tunnels have not led the team to Cleopatra’s tomb, as international newspapers have reported.  

We have found nothing that indicates the presence of the tomb of either Cleopatra or Mark Antony,” he said, adding that excavation work in the area will be resumed in November.

Precious metals continue to perform

 

by Vivian Salama

The National

DUBAI // Precious metals and “soft” commodities will continue to outperform this year as investors look to hedge against inflation through greater portfolio diversification, an industry expert has forecast.

Energy and grain should also perform well in the coming year, although not at last year’s levels, he suggests. 

“Since the commodities business has been very successful this year, more money is coming into the business,” said Victor Sperandeo, an author on commodities trading and the chief executive of Alpha Financial Technologies, as he addressed the 2008 Commodities Investment World conference.

“So what happens is as prices rise, more money comes into the business, because we [traders] start buying more.” Investors are celebrating this long awaited rally. Thanks to commodities, they are finally seeing significant gains in markets that in recent years have been dominated by the dotcom and housing sectors. Prices are up 20 per cent since the end of December, according to CRB, a leading industry index that tracks the prices of 19 commodities.

Experts suggest several factors have been contributing to the commodities rally, including traditionally higher spending during a US election year and the credit crunch, which as of late has served as a distraction to central bankers. The Beijing Olympics have also been stimulating higher commodity prices, said Mr Sperandeo.

“China is a huge buyer of commodities at this time,” he said, citing the country’s overwhelming consumption of everything from energy to industrial metals, cement and water. “This will continue until after the Olympics, then they may worry about the effects of inflation and other things.”

Gold and oil have continued to earn praises – from investors at least – for their performances in the past year. Crude oil sold at US$132.19 per barrel in New York on Friday, up 103 per cent from $64.97 a year earlier. Last Thursday, oil hit an all-time high of $135 per barrel on both sides of the Atlantic.

“I’m now saying that oil will hit $150 [this year],” said Mr Sperandeo. “It has a lot to do with supply and demand and what the US is doing to constantly restrict supply from coming on the market.”

While gold prices have slipped some 14 per cent since hitting a record high price of $1,030.80 an ounce on March 17, the precious metal is heading upwards and many investors believe it will inevitably surpass the $1,000 mark again this year. “Gold is just a reflection of inflation and world chaos,” said Mr Sperandeo. 

Mark Mathias, the chief executive of Dawnay Day Quantum, a UK-based investment firm, speculated on what he called the one fundamental difference between gold and oil.

“There are very big above-ground supplies of gold available in the [exchange-traded funds], exchange rate commodities and in central banks,” he said. “As an investor, the risk, if either of those parties starts selling, is there could be a big supply of gold in the market in a very short space of time.”

Far from being overly optimistic, investors warn that commodity rallies are cyclical, and what goes up must eventually come down. However, many believe that the market will continue to be bullish for as long as 10 years to come, particularly as capital shifts from the West to emerging markets in the Middle East and Asia.

The subsidising of infrastructure and economic development by emerging markets has led to a massive wave of global industrialisation. This massive scale of development will continue to fuel higher commodities prices as the demand for oil, as well as food, continues to grow.

“The money supply has increased 13 times from $800 billion [in 1971] to over $12 trillion two years ago,” said John Lee, the principal trader at Mau Capital Management. “Just from a money supply perspective, we still have a way to go to manage the amount of money that’s out there.”

However, Mr Mathias said that operational burdens on the commodity supply chain – whether they were shortages of delivery lorries, problems with mining equipment or poorly operated ports – plus a booming demand from countries in the Middle East and Asia, could be what was really driving prices up.

“Commodities require a shortage of supply, otherwise the price will not go up,” he said. “Every step of the way, the commodities supply chain is stretched, and there isn’t sufficient capacity to put through the degree of commodities being demanded.”

vsalama@thenational.ae

Rice importers call for 25% subsidy

 

by Vivian Salama

The National

Importers, anxious over the rising prices of basic food items, are calling for the Government to subsidise rice by at least 25 per cent.

Importers say their margins are being squeezed and, in some cases, they are making losses as they attempt to reconcile record commodity prices with a demand by retailers to keep costs down.

“Rice is the most basic food item so, of course, it should be subsidised,” said Riaz Hussein Bhojani, the general manager of Rashwell Company, a Dubai-based importer.

Global rice prices jumped from US$650 (Dh2,386) to US$1,000 per tonne in just the first three months of this year, hitting a 25-year high. India’s basmati rice export prices have also gone up from US$1,100 to US$1,200. In response, several retailers, including Baniyas Co-operative Society, Carrefour, the Union Co-operative Society and Lulu hypermarkets have agreed to implement price caps on dozens of basic commodities.

“International rice prices are going through the roof so, by fixing retail prices here at 2007 levels without subsidies, the Government is not taking into consideration what importers will have to face. And [they are] making room for a black market,” an Abu-Dhabi rice importer told Reuters. “I think that asking for only 25 per cent rice subsidy is a fair and modest demand.”

Last year the UAE imported about 750,000 tonnes of rice from countries including India, Pakistan, Thailand and Egypt, traders said. According to Mr Bhojani, one tonne of Pakistani basmati rice now costs his company Dh5,505 to import, up from Dh2,569 last year. A 39kg sack of Pakistani basmati rice costs him as much as Dh230.

“It is difficult for me to understand why the government is giving millions of dollars to other countries and not helping its own people,” Mr Bhojani added.

A senior official with the Emirates Society for Consumer Protection, a branch of the Ministry of Economy, believes that rice subsidies are not a solution to the crisis. 

“Salary subsidies would be a better economic option than rice subsidies,” he said, noting that the Government was not presently considering such a move. The Government is days from announcing a contingency plan to alleviate the burden of inflation on UAE residents, the official added. 

The Abu Dhabi Department for Planning and Economy has reported a 10.7 per cent jump in inflation last year, driven by higher rents, transport and food costs. According to the Emirates Consumer Protection Society, food inflation could rise as high as 40 per cent this year.

While several countries in the region have used subsidies as a way of addressing domestic poverty, high inflation has forced some to reconsider.

In Syria, for example, basic items such as sugar, tea, bread and water are subsidised at a price the country’s poorer residents can afford. However, with the influx of more than 1.5 million Iraqis to Syria since 2003, the country’s lawmakers have considered dropping subsidies as the economic burden becomes increasingly hard to absorb. Food and energy subsidies in the country are predicted to cost US$7 billion this year – almost 20 percent of the country’s gross domestic product, according to government estimates.

Burhan Turkmani, the general manager of Al Rabiah Trading, a Dubai food importer, said he was not optimistic that subsidies would be applied here, despite believing that a 25 per cent subsidy was a reasonable demand. “It is a rich country and the economy is strong, so I believe the Government can certainly absorb such a cost. But I don’t think it will happen because of the high number of foreigners living here,” he said. “I think a government’s first priority is to help its own citizens, so maybe rice subsidies are not on the top of the list.”

Among other measures, the Government is exploring the option of purchasing farms in Pakistan in an effort to boost strategic food reserves. Last month the Ministry of Economy urged retailers to start stockpiling basic food items to prevent shortages caused by export bans in countries such India, Egypt and Brazil. The Government has since recommended that, as a cost-cutting measure, retailers consider eliminating the middlemen when importing commodities.

Sharjah: register or leave

 

by Vivian Salama and Robert Ditcham

The National

Thousands of construction workers being housed in Sharjah may be relocated under a proposal requiring them to be employed by a company registered in the emirate, following several incidents of labour-related strife. 

In a proposed amendment to the labour law, companies that are not licensed to operate in Sharjah will be prevented from using the emirate to cheaply house workers they employ for jobs elsewhere in the country.

The affected companies will be forced to either obtain a trade licence through the Sharjah Municipality enabling their resident workers to stay, or find new accommodation for them in the UAE’s six other emirates.

By way of comparison, the fees for companies obtaining a licence from Hamriyah Free Zone in Sharjah range from Dh12,000 (US$3,260) for a general trading licence to Dh2,750 for an industrial, commercial or service licence.

Two senior members of the Sharjah Government confirmed that the law was in the final stages of approval and just weeks away from coming into effect. 

They said they were pursuing the amendment to the current legislation to improve law and order following a series of protests and violent skirmishes over the rising cost of living. 

“Most of the companies are in Dubai, but the workers live in Sharjah,” said Sheikh Sultan bin Ahmed, chairman of the Sharjah Commerce and Tourism Development Authority. “The companies will be forced to either register their workers in Sharjah or find new accommodation in Dubai or the other emirates.

“If anything happens, it is usually Sharjah to blame,” said Sheikh Sultan, who added that the number of workers living in the emirate greatly outweighed the number of police officers available to contain labour protests. 

However, the move would be unpopular with workers who commuted from Sharjah to escape Dubai’s high rental rates, said Burhan Turkmani, the general manager of the Dubai-based Al Rabiah Trading company, a food importer.

“Sixty per cent of my employees live in Sharjah,” he said. “It’s far too expensive for certain employees to live in Dubai.

“These people, they live there, they spend much of their income in Sharjah, their children go to school in Sharjah, and they only go to Dubai to work. It may be a bit harsh. Food prices and the cost of living are going up, so people are suffering as it is.”

With a more affordable cost of living than Dubai and lower operating costs for worker compounds, Sharjah has attracted thousands of construction labourers. Many are employed in Dubai or Abu Dhabi, where construction is expanding rapidly.

In recent months, Sharjah has been rocked by violent protests. 

In April, more than 600 Asian labourers were arrested after a protest in the Al Nahda district. Workers from the Tiger contracting company attacked police with stones and bricks from an upper storey of a building under construction, the emirates news agency WAM reported.

Weeks earlier, about 1,500 rioting workers set alight management offices in a labour camp, clashing with police and officials.

Shehab el Orabi, the senior development manager at the Waterfront real estate project in Dubai, said he understood Sharjah’s motive for amending its labour law.

“I fully agree with them. Why would I have to take care of problems arising from labour camps there if they [workers] were not even working in Sharjah or contributing to the local economy?”

Mr Orabi said implementation of the law would likely encourage companies to build more modern accommodation facilities in proximity to the places that the men worked, thereby cutting the travel time to work and reducing the number of vehicles on the road.

About 250,000 vehicles travelled through Sharjah every day to locations outside the emirate, 50,000 of which were trucks, Sharjah officials have reported. 

Mr Orabi said construction companies required to remove their workers from Sharjah would seek to build new sites or lease accommodation at existing facilities. This would create a strong demand for sites such as Nakheel’s Omran worker housing project in Dubai, which had the capacity to house 60,000 workers, he said.

vsalama@thenational.ae

rditcham@thenational.ae

Building a Green Dream

 

By Vivian Salama

The National

While the UAE’s explosive development attracts admiration from around the world, ecologists are deeply worried that the country is consuming resources at an unsustainable rate.

The UAE has come in for harsh criticism from environmental awareness groups such as the World Wildlife Federation (WWF).

In its Living Planet Report last year, the WWF said the UAE used more biologically productive land to provide resources and more seawater to absorb waste than any other country proportionate to its size.

“The UAE is living as if they have 6.6 planets,” said Ian Cheshire, the chief executive of Kingfisher, a UK-based home furnishing centre.

“At the risk of naming and shaming … sustainability is just not there,” Mr Cheshire told delegates at last month’s World Retail Congress in Barcelona, citing the Living Planet Report.

With an annual population growth of more than five per cent driving an ever-mounting demand for retail and residential space, plus extreme summer temperatures, UAE society is guzzling resources.

“The whole business model is based on much higher resources,” Mr Cheshire said, conceding that the UAE’s intensive expansion put it at a disadvantage to countries such as the United States and the United Kingdom, which experienced their growth booms more than a century ago. 

“It’s to be expected,” he said. “The key in the UAE now is to make it more manageable.”

Click here to read more…

UAE may buy Pakistan farms

 

by Sarmad Khan and Vivian Salama

The National

ABU DHABI // Inflation and the spectre of long-term food shortages have prompted the Government to consider a new strategic investment – the purchase of large-scale farms in Pakistan and other countries.

The aim is to protect the country from the turmoil of soaring wheat and rice prices and export bans by producing countries that could lead to food shortages.

The Government is holding exploratory talks with Pakistan on the proposal, according to a senior Pakistan government official and the Emirates Society of Consumer Protection, a division of the Economy Ministry.

The Government was looking to acquire large land holdings and import food at 20 to 25 per cent less cost, a senior Pakistani government official said. 

There are six parties in the chain between the farmer and the time the product reaches retailers including the farmer, broker, exporter, importer here, wholesaler and retailer. 

According to a Pakistani official each party retains a 5 per cent margin on each transaction, and by eliminating several steps the government can bring the cost of food down by 20 to 25 cent, according to a senior Pakistani government official.

“The talks have been going on between Pakistan’s government and the UAE’s Ministry of Economy for some four months, however no concrete decision is made yet,” he said. The ministry was seeking support and guarantees from Pakistani counterparts before getting into large-scale corporate farming, he added.

Rising inflation is one of the driving forces behind the Economy Ministry’s decision to consider alternative food sources that would secure supplies for the country while cutting costs.

“We believe that, if we get products directly from the farms, it will encourage market competition,” an official at the Emirates Society of Consumer Protection said, adding that the government was studying similar options in other countries.

Pakistani officials say their government will facilitate negotiations between farmers and UAE representatives but it is not involved in growing food and cannot help the UAE set up government-supported farms.

Last week Pakistan announced the introduction of tax exemptions, duty free import of equipment and 100 per cent land ownership in specialised free zones in its agriculture, livestock and dairy sectors to lure potential investors.

It is expected to announce more concessions to entice investments.

“Agricultural free zones will be set up within the next four to five months, which will open up doors for the nations to own sources of food supply,” the Pakistani official said. “It is a good opportunity, especially for GCC countries which are dependent on food imports.”

GCC countries rely heavily on imported food and the UAE imports nearly 85 per cent of its supplies for an estimated Dh11 billion (US$3bn) annually.

The GCC is the largest importer of food from Pakistan, according to Pakistani officials. A number of GCC-based companies have already turned to Pakistan for alternative resources. Qatar Livestock Company is to invest $1bn in corporate farms in Pakistan, according to Huma Fakhar, an adviser to the Bahraini government. Some Saudi Arabian groups, particularly Al Rabie Group, a dairy company, have expressed interest in buying land in Pakistan.

“There is a global crisis right now,” said Miss Fakhar. “If you do not prepare these reserves now, then three to four years down the line it will turn extremely critical.”

Several UAE-based retailers including Baniyas Co-operative Society, Carrefour, Union Co-operative Society and Lulu hypermarkets have agreed to help the government to curtail inflation by putting price caps on basic commodities.

Last week the Economy Ministry urged retailers to start stockpiling basic food items to prevent shortages resulting from export bans by countries like India, Egypt and Brazil.

The UAE government has also urged retailers to consider eliminating middlemen when importing commodities to cut costs. While executives like José Luis Durán, the chief executive of Carrefour, encourages supermarkets to work directly with farms, others are concerned that this carries a hidden catch.

“If you want to make money as a farmer, go to a place where the farmers are making money, not a place where the land is cheap,” said Jannie Holtzhausen, chief executive of Spinneys in Dubai. “What has now suddenly changed in the world that the economic model drives governments to become farmers?”

Concerned about what the initiative means to their businesses, local importers are speaking out against it.

“Eliminating traders from this process would be a mistake,” said Burhan Turkmani, the general manager of Dubai-based Al Rabiah Trading Company.

“Farmers are not exporters and governments are not importers,” added Riaz Hussein Bhojani, the general manager of Rashwell Company, another trading company

Hotels look to locate near retail space

by Vivian Salama

The National

The region’s retail and tourism sectors are becoming increasingly interdependent, hoteliers and real estate developers say.

Hotel developers looking to build in the GCC are increasingly seeking sites close to retail space, according to officials in both industries.

“When we look for new locations, the first thing we ask is, ‘Is it near to a mall or shopping centre?’” said Samir Baidas, the vice president of international lodging development for Marriott.

The GCC saw a total of 2,319 new hotel and serviced apartment rooms open in the first quarter of 2008, according to TRI Hospitality consulting. By last year there were a total of 96,138 new hotel and hotel apartment rooms opened in the region. This number is due to increase by 29 per cent by 2010.

International exhibition and publishing company DMG World Media says it expects a demand for up to 400 new malls in the Middle East, North Africa and South Asia in the next 10 years. Operators of Dubai shopping centres say more malls equal more business, particularly as the city seeks to establish itself as a global shopping destination. More than 100 projects worth more than US$70 billion in hotels and leisure tourism activities are underway in the UAE.

“Demand for these services is so strong that there’s enough for everybody to go around,” said Ben Godon, director of Vision, a hospitality asset management firm. “People who haven’t got involved in these mixed-use developments are eager to do so now given the successes of this model.”

The InterContinental Hotel Project opened three new hotels, or 1,000 rooms, in Dubai Festival City this year coinciding with the annual Shopping Festival. Dubai hotels reported occupancy rates between 92 per cent and 95 per cent in January and February thanks largely to an influx of festival goers.

Officials at Festival City estimate that tourists generate 20 to 30 per cent of their retail profits, with many of the shoppers coming from hotels on their premises. “Thirty per cent is obviously very significant,” noted James McCallum, group director of retail for Al Futtaim Group, the developer of Festival City, adding that the numbers were sometimes higher during peak tourism seasons. “There is really no separating the two in Dubai, and that will increasingly become the case in Abu Dhabi looking ahead.”

The Marriott is developing two Courtyard hotel resorts in Saudi Arabia and Kuwait City, both beside major shopping centres. Officials in the hospitality industry say soaring summer temperatures force them to look for alternative methods of entertainment when beaches lose their allure, and air-conditioned retail space is the most practical option. “When families come for a long weekend, they have their families in a secured area, closed, no hassle of transportation, away from the heat, and they can spend the whole day without going away from the business block,” said Mr Baidas.

Retail developers also build malls with the tourism market in mind. In Bahrain, Dubai-based Majid Al Futtaim (MAF) is working on the country’s first City Centre which will be its largest mall. As in Dubai, the key to the prosperity of Bahrain’s retail industry is simple: tourism. In 2007, it generated a record Dh62.39 billion (US$17 billion), a 15 per cent increase on 2006, according to government figures.

Most of Bahrain’s tourists come from the GCC. They included 7.4 million Saudi Arabians in 2006. For mall developers, this is big business. “Malls of this size target tourists and local residents,” said Shahram Shamsaee, senior vice president of retail for MAF Malls. “But of course, when we develop these malls, we have these tourists in mind, especially in this part of the world.” 

Industry insiders say Dubai has excelled in retail tourism, with events such as the Dubai Shopping Festival making it a global retail hub. Since its launch in 1996, the festival has grown significantly. The first festival grossed an estimated Dh2.15 billion (US$59 million) and attracted 1.6 million visitors. Last year it attracted more than 3.5 million visitors, earning Dh10.2 billion.

“Dubai has combined tourism and shopping in a very dynamic way,” said Michael Kercheval, president of the International Council of Shopping Centres (ICSC). “To the extent that tourism development continues at the same level, it will continue to boost retail, just as the rate of retail also encourages tourism.”

Greater Need for Halal Marketing

 

by Vivian Salama

The National

ABU DHABI // A sign on display at the Burger King in the capital’s Al Wahda Mall answers a question more and more customers are asking. “We sell only halal products,” the sign reads. 

Catering to the world’s fastest growing religion of about 1.4 billion people, the rapidly growing halal industry, worth an estimated Dh7.7 trillion (US$2.1 trillion), has broadened in scope in recent years to include everything from food to Islamic fashion and textiles, as well as pharmaceuticals, cosmetics, and even Islamic finance.

Research conducted by Brand Union has found that 70 per cent of Muslims worldwide follow halal standards to some degree. It is therefore no surprise that the industry could easily account for 20 per cent of world trade in food products by 2025, according to the Canadian government’s Agri-Food Trade Service.

However, the implementation of halal standards have suffered a major setback rooted in the global dispute over what qualifies for the designation.

“There are 192 countries under the United Nations banner and there are that many variations of halal,” said Muhammed Munir Chaudry, the president of the Chicago-based Islamic Food and Nutrition Council of America (IFANCA). 

Pamela Pike, a spokeswoman with the Halal Exchange, an international e-commerce business that assists with the online halal trade, said many governments, including the UAE, Turkey, Malaysia and the GCC, as well as halal certification bodies, had attempted to set standards for the industry.

“For the consumers this diligence and structure will be beneficial as it will boost their ability to buy halal with confidence.” 

While most countries in the Middle East and North Africa regard almost all Sharia-compliant products as halal, countries in South and South East Asia limit this designation to food products, following the teachings of Malaysia, a global leader in halal food production.

The UAE has never required businesses to label halal products.

Thus, the push to adopt a global halal trademark is being received with mixed responses. 

“Some of the larger companies, feel like their business will suffer if they put a logo on because some other customers will not like it or they will think that before, your product was not halal,” said Dr Chaudry. “They are afraid of a backlash.”

Industry analysts say that businesses will capitalise far more from this growing industry if retailers and manufacturers put greater effort into branding and marketing their halal products.

“It boils down to gaining the confidence of consumers,” said Duncan James, the strategy director at Brand Union. 

Analysts say Islamic banking, which earns between Dh734 billion and Dh1.84 trillion annually, has been the most active of the non-food sectors in promoting its Sharia compliance, launching many programmes worldwide in line with Islamic guidelines. 

For example, in 1998, HSBC launched its Islamic “Amanah” programme – the Arabic word for safety – making up one of the largest Islamic banking teams of any international bank.

The programme does not just cater to those in the Muslim world, but rather, was marketed as a financial option for those in Europe and the Americas looking for a reputable sharia-compliant bank. Similarly, Barclays introduced “Sharia compliant accounts” in keeping with Islamic standards.

Another active sector looking to boost its portfolio with Sharia-compliant products is the cosmetics industry, worth an estimated Dh2.06bn worldwide. Brands such as ACTIValoe, Sunbreeze and Kandesn have already earned the approval of the IFANCA and various other halal certification boards.

According to Mr James, several industries in the region could do more to capitalise on the halal brand. For one, he suggested the launch of a halal airline, similar to that launched by the Vatican and Italy’s Mistral Air last year, to transport pilgrims to holy sites. “Such an airline could provide halal food, calls to prayer, copies of the Quran in seat pockets, religious programmes on the in-flight entertainment system and separate sections for male and female passengers,” he said.

A similarly ripe industry, according to Mr James, is halal hospitality, particularly women-only hotels, to permit Muslim women to book rooms without a male guarantor, as is required in Saudi Arabia. At this week’s Arabian Hotel Investment Conference, Abdulla Mohamed Almulla, the chairman of the Dubai-based Almulla Hospitality, is due to reveal the details of his $2bn scheme to develop an Islamic-compliant hotel brand portfolio.

“There may even be opportunities for malls to brand themselves as all-halal in the region,” speculated Mr James. “There are so many retail opportunities out there that no one has really taken advantage of.”

Retailers Seek Relief from Importers

 

By Vivian Salama

The National

DUBAI // Tensions are brewing between UAE-based importers and food retailers over ways to ease the burden of rising commodity prices. Record prices on staple items such as rice and wheat have left supermarkets scrambling for solutions to help customers cope.

“We’re not shying away from our responsibilities,” said V Nandakumar, a spokesman for Lulu hypermarkets, which signed a memorandum of understanding last month with the Ministry of Economy implementing price caps on 32 basic items. “From the wholesalers and importers and suppliers, we hope that they also follow similar price caps or some kind of measures to curb the [impact of] inflation.”

However, according to Burhan Turkmani, the general manager of the Dubai-based Al Rabiah Trading, importers are at the mercy of global exporting countries as market prices on commodities continue to climb.

“We are dealing with exporters and brokers outside this country, so the price is out of our hands and in their hands,” said Mr Turkmani, whose company imports staple foods from countries including Thailand, Vietnam, Pakistan, India and Egypt.

Various factors, including limited water and agricultural land, force countries in the Gulf to rely heavily on imported food items. The UAE imports nearly 85 per cent of its food. However, more than 70 per cent of all UAE food imports, worth Dh11.01 billion (US$2.9bn) annually, are then re-exported to markets around the world, including other GCC countries, the Indian subcontinent, North and East Africa, and the Central Asian Republics.

Global rice prices jumped from US$650 to US$1,000 a tonne in the first three months of this year, reaching a 25-year high. Last week, Thai rice surged to a record US$1,000 a tonne, three times its level in January, and India’s export prices for basmati rice rose from US$1,100 to US$1,200. In March, India halted exports of non-basmati rice as a way to curb rising prices and avoid domestic shortages, a move that has attracted strong criticism from UAE retailers, whose customers include the 1.4 million Indian nationals living here.

According to Riaz Hussein Bhojani, the general manager of a Dubai-based importer, Rashwell Company, the landed price of Pakistani basmati rice is now Dh5,505 a tonne, up from Dh2,569 last year. Mr Bhojani said he now paid as much as Dh230 for a 39kg sack of Pakistani basmati rice. Al Rabiah pays about Dh160 for each 38kg bag of Indian basmati rice, up from Dh115 last year.

“There is absolutely no point in putting a cap on anybody without listening to the importers,” said Mr Bhojani. “The Government needs to form a price committee and then take people from the importers and from ministry and maybe some retailers and find solutions.”

This week, Baniyas Co-operative Society followed the lead of larger retailers such as Carrefour, Union Co-operative Society and Lulu hypermarkets by implementing price caps on dozens of basic commodities in an effort to ease the burden of inflation. Many retailers fear that price caps will ultimately result in losses since they are buying their commodity stocks at one price but selling them for less.

“Price caps should be on the suppliers, not the retailers,” said David Berrick, the retail general manager of Abela Supermarkets. “We can lower our prices and use the marketing tool of ‘everyday low prices’, but if supplier costs go up, we have no choice but to raise prices.”

Mr Turkmani said he understood the concerns of retailers. However, suppliers are being faced with similar challenges. “If importing costs go up, then we are left with no choice but to boost our prices,” he said.

This week, the Ministry of Economy urged retailers to start stockpiling basic food items to prevent shortages caused by export bans in countries such India, Egypt and Brazil. The ministry has also urged local retailers to consider eliminating the middlemen when importing 15 basic commodities as a cost-cutting measure.

“It’s cheaper for the hypermarkets to buy from the farms directly because it eliminates the costs from middle agencies plus it encourages greater sales competition, which ultimately benefits the consumer,” said a spokesman for the Emirates Society of Consumer Protection.

Mr Turkmani objects to such alternatives, saying the industry will suffer major consequences. “Retailers don’t have the experience to deal directly with the farmers,” he said. “We know the best locations, have the best contacts, and can find the best quality of food out there. Eliminating importers would be a mistake.”

The chief executive of Carrefour shares the Government’s sentiments. “We are obliged to find new resources,” said José Luis Duràn last month at the World Retail Congress in Barcelona, Spain. “We must ask how we can work directly with farmers to ensure sustainability, good quality, with reasonable prices.”

Ultimately, said Mr Nandakumar of Lulu, dialogue between regional retailers and importers had thus far been counterproductive. “We are having a blame game here,” he said. “We did our part. Now some kind of initiative from the suppliers and importers must be done to gain the confidence of the country.”