Sunday , October 22 2017

Cooperative societies ‘warn’ of a wave of catastrophic price hikes

KUWAIT CITY, Nov 27: The Union of Consumer Cooperative Societies and officials of cooperative societies warned of “an upcoming wave of catastrophic price hike” which will affect the prices of all commodities and foodstuff in the first quarter of the year 2017.

They affirmed about the implementation of new price regulations on rents for state properties and real estates, as well as charges of services and costs of electricity and water usage.

These new price regulations will spark series of price hikes on consumer goods in order to compensate the loss that the cooperative societies and supermarkets will incur due to increase in rents, market costs and charges of storage facilities.

In this regard, Head of the Union of Consumer Cooperative Societies Dr Saad Al-Shabo circulated a decision to all cooperative societies in which it was affirmed that Ministry of Finance has requested Ministry of Social Affairs and Labor to start collecting increased rents for state properties from April 2017 and higher charges for services from May 15, 2017.

The circular indicated that the rate of increase in rents and charges of services could reach 300 percent for some activities and sectors.

It explained that the value of an area of one square meter in a supermarket will increase to KD 3.5 based on the new regulations, to KD 1 in an administration building, to KD 0.750 in a store, to KD 0.120 in a petrol station and to KD 0.250 in supplies buildings.

The rents of investment stores rented by third party will increase by 30 percent of the annual investment contract, while unused space will cost KD 5 per square meter and supplies stores will cost KD 2.250 per square meter.

Dr Al-Shabo revealed that he considers the implementation of these new regulations as “catastrophic” for consumers. He stressed that it will cause companies to increase prices in cooperative societies because of the increase in the rents of state properties and utilities, which consequently will force the cooperative societies to increase the prices of its commodities in order to compensate for the increase in the rents of their premises.

By Fares Al-Abadan Al-Seyassah Staff

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