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In line with a decision by the Ministry of Economy, goods in supermarkets have been priced since March 1 in dollars with the aim of providing stability to prices that were subject to constant fluctuations. However, five months on, supermarket prices are far from becoming stable.
Since early March, Lebanese consumers have been screening price tags in dollars at supermarkets. Despite the dollarization, which was intended to stabilize prices in the context of hyperinflation, it has become evident that this measure has not effectively ended the recurrent fluctuations in prices. While a study conducted by the Ministry of Economy showed a decrease in the cost of essential household commodities and an average 7% decline in consumer prices between January and March 2023, many customers continue to observe a persistent rise in prices. Head of the Syndicate of Supermarket Owners Nabil Fahed confirmed these observations.
Dollarization Does Not Guarantee Price Stability
Head of the Syndicate of Food Importers in Lebanon Hani Bohsali, firmly asserted to This is Beirut that any price hikes lacking justification are deemed unacceptable. “By ‘unjustifiable,’ I refer to situations where substantial variations in prices are observed from one day to the next,” he explained.
Nonetheless, Bohsali acknowledged that all major retailers are deploying major efforts to promote their merchandise, as the predominant cash-based economy in Lebanon requires them to generate income to settle their dues to the suppliers. Moreover, he emphasized that “they do not have the luxury of arbitrary price increases. Although exceptions may occur, it is not the standard practice.”
Bohsali stressed that pricing in dollars does not imply immunity to price fluctuations. “We have only removed the currency exchange factor,” he said, adding that prices can still rise or fall globally.
For instance, the price of vegetable oil significantly declined in the past three months, leading to a decrease in price tags on the market. On the other hand, sugar and rice prices have increased. The displayed tags now fluctuate according to international market prices. However, they are no longer subject to sudden increases of 10 or 20% within a week, as was previously observed when pricing was in Lebanese pounds and was subject to constant fluctuations of the exchange rate.”
The Syndicate’s representative further drew attention to the significant impact of the ‘customs dollar,’ which surged from 1,500 to 86,500 Lebanese Pounds in just six months. As a consequence, certain newly imported products are subject to higher customs charges. He urged consumers to share concrete instances of unreasonable price hikes in order for the Ministry of Economy to take the appropriate action.
The Ministry also encourages citizens to report price exploitation cases in order to initiate the necessary measures and impose sanctions on those involved in unjustified pricing practices.
