Supply kickbacks ‘rife’ in Dubai hotel industry

Industry experts say kickbacks are way of life to win supply deals for big hotel chains
Supply kickbacks ‘rife’ in Dubai hotel industry
Kitchen staff from Dubais Burj al-Arab hotel are currently on trial accused of taking bribes from suppliers
By Louise Birchall
Thu 12 Jan 2012 12:34 PM

Hotel staff in Dubai are regularly bribed by suppliers creating a trade in poor-quality food and drink products sold at inflated prices, industry sources have said.

Suppliers complained they had been effectively shut out of the market by companies able to net hotel contracts by offering generous kickbacks to staff.

“It’s getting quite bad; it makes it really difficult to do business. For somebody that doesn’t have deep pockets or is not open to these unethical practices, it is very difficult,” one Dubai-based Halal-food supplier told Arabian Business’ sister title, Hotelier Middle East.

Suppliers were driving the practice of offering kickbacks, he said.

“But these individuals in the hotels shouldn’t buy into such unethical practice, and they’re the ones encouraging it by accepting it,” he added.

A Dubai court heard this week that kitchen staff  at Dubai’s luxury Burj al-Arab hotel had taken nearly $250,000 in bribes in exchange for buying substandard food from suppliers at marked-up prices.

The head chef and butcher in the Jumeirah Group-run property had also allowed frozen fish to be passed off as fresh produce to guests, the Dubai Criminal Court of First Instance was told

In a statement to the court, the chef said he had been approached by two staff members following his promotion to head chef in 2008 and told he would be paid monthly in exchange for only buying vegetables, meat and seafood from four specific suppliers.

A purchase manager at one Dubai hotel said bribes were not specific to food and beverage but spanned all areas of the hotel chain.

 “Kickbacks are… also in engineering, pre-opening projects, purchase of furniture fixture and equipments and operating stocks and equipments,” the manager said. “For example how many financial controllers make it a point to check engineering-related items?”

Smaller scams can be as simple as accepting smaller volumes of food, for the same price.

“Lower-level employees, for example the receiving clerk who is in-charge of receiving goods. He can be bribed by a fruit and vegetable vendor to receive less. If the order was for 35kgs of tomatoes, then he would be receiving only 25kgs physically whereas the invoice would show 35kgs. These are some of the examples and there are more,” the manager said.

Former Taj Hotel Dubai executive chef Joe Vock also claimed that bribery was a "problem" in the market. 

"It affects all hotels here as a lot of them aren't buying the best product that is available because the guys are taking kickbacks, especially in the purchasing departments."

Marcus Dudley, director of food and beverage, Moevenpick Hotel Jumeirah Beach, said he personally hadn’t been offered a bribe.

“We had suspicions about six months ago that one of our employees was involved in that, but no proof and we called in about five different suppliers and asked them directly and of course they said 'no' and were highly offended, whether they were involved in it or not,” he said.

Ibn Battuta Gate executive chef Tunji Oladipo, who has worked in Dubai for 11 years, said that corruption is not specific to Dubai’s hotel market.

“It’s always been the case everywhere. When I worked in London it was the same situation, it’s just become a little more aggressive recently because all the suppliers are going down the same route, supplying the same type of things – there aren’t a lot of specialist items.

“There has always been a lot of supplier buttering up, not so much bribes with money – but gifts and things like that and now they are a little more aggressive,’ added Oladipo.

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