By Shane McGinley
Drinks companies reduced can sizes, while keeping prices constant
US drinks giants Pepsi and Coca Cola have been accused by UAE consumer protection authorities of “unacceptable fraud” by reducing the size of their cans without reducing the price and are to have some of their products removed from shelves in the emirates.
The Ministry of Economy told reporters on Sunday the two companies had reduced the size of their AED1.5 cans from 355ml to 300ml without permission and had also removed the price tag.
“What the two companies did is an unacceptable fraud and cheating….since they reduce the can size and maintained its price, they simply increased its price in violation of the consumer protection laws,” Hashim Al Nuaimi, director of the consumer protection division at the UAE Ministry of Economy was quoted as saying by Emirates 24/7.
“We consider this as deception of consumers which must be stopped,” he added.
After a number of complaints from consumers, the ministry has ordered the cans to be removed from shelves. However, a number of supermarket managers contacted by Arabian Business claimed they were unaware of the move and had not yet been instructed to remove the 300ml cans from their shelves.
Earlier this month, PepsiCo announced it was planning to cut 8,700 jobs in 30 countries as part of plan to save an extra $1.5bn over the next three years and compete with its larger rival.
PepsiCo, which owns nineteen global brands including Gatorade, Tropicana, Pepsi Max, Mountain Dew, Aquafina, Mirinda, Quaker, Lay’s, Walkers and Fritos, said revenue in the fourth quarter of 2011 rose 16 percent in the Asia, the Middle East and Africa (AMEA), with double digit snacks volume growth in the Middle East.
However, PepsiCo did not outline if any of the 8,700 jobs would be lost in the Middle East.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Normally, soft drink companies do not bottle their own products. They leave that to a local bottling company and provide them with the syrup to make the soft drink. I don't have a can of Coke or Pepsi in front of me, but I wouldn't be surprised if it said that it is bottled in the UAE by an Emirati bottler. If that's the case, Coke and Pepsi were probably unaware of this "fraud", and the fault lies with the Emirati bottler, and he will probably be in default under his license agreement with Coke and Pepsi as a result.
The price of soft drinks was raised last year from 1 dirham to 1.50 dirhams in one go, which is 50 percent. Approved by the government.
The need for such a drastic price increase was blamed on rising sugar cost yet even diet soft drinks containing NO sugar had the same increase.
And then, customers are further distressed when the can size is reduced by 20 percent.
Why are there no penalties? Are we customers simply to give milk and honey to the greedy companies ripping us off?
How can we get refunds if the government policy dictates the companies acted illegally?
Oh come on, be fair. Firstly, there had been no change in price in the previous 20 years + so there was a cumultaive need for a price increase based on cost increases for everything - tin plate, sugar even water. Secondly, in a country where the smallest unit of currency is 25 fils, there is no option to increase the price by anything other than 25%, 50%, 75% etc. Thirdly, the price of a can of carbonated soft drink in the UAE remains far below the equivalent in Europe, which is not true of most foodstuffs. Rather than whingeing, learn to recognise a bargain when you see it!
Is there sugar or HFCS in the can ?
Does the UAE government have a check on the contents ?
As far as my experience goes, there is something very different between the can and the fountain drink quality.
The fountain drink causes a sore throat almost every time it is taken. Most people living in Dubai can observe this if you notice. Drink a can and drink a fountain glass from the mall and notice the difference.