Bahrain: Authorities last night announced a crackdown on traders trying to exploit consumers following an increase in import duty on tobacco.
This followed reports that the sudden increase announced on Monday had led to confusion and panic buying yesterday.
Some traders were even allegedly hoarding or overcharging for tobacco products with a number of cold stores and supermarkets displaying empty shelves.
The Industry, Commerce and Tourism Ministry’s Consumer Protection Directorate said it would crack down on those selling cigarettes at higher rates or resorting to hoarding.
It said as part of measures to boost state revenues the import duty levied on tobacco was increased from 100 per cent to 200pc.
However, the price of a single packet of cigarettes will go up by 200 fils only.
For instance, a packet of cigarettes usually priced at BD1 would be up by a maximum of 200 fils, to be sold now on at retail outlets at BD1.200.
But the prices of US tobacco products would remain unchanged because under the Free Trade Agreement (FTA) the import duty exemption took effect from January 1, 2016.
The directorate, in a statement last night, also warned commercial outlets and shops in Bahrain against selling available stocks of cigarettes at higher prices thereby affecting market stability.
“All shops, distributors and sales points are urged to comply with implemented rules and regulations in this regard,” said the statement.
“Violators will face a maximum of five years in prison or a minimum fine of BD5,000, or both, without prejudice to any other administrative measures.”
Such practices, the directorate said, are considered a violation of Consumer Protection Law No 35 of 2012, Chapter 4, Articles 12, 13 and 14.
It said that the new levy is deemed special and does not constitute a customs tax, nor does it contravene Bahrain’s legal or trade obligations with other countries, relevant regional and international organisations, specially the GCC and the World Trade Organisation (WTO).
Sources told the GDN that the import duty on alcohol was now 225pc, up from 125pc earlier, while the import duty on tobacco was increased from 100pc to 200pc.
On Monday, Information, Parliament and Shura Affairs Minister and official government spokesman Isa Al Hammadi told a post-Cabinet Press conference said that the decision was made by Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa.
Despite the official announcement, the GDN learned that some traders were allegedly hoarding or overcharging for tobacco products with a number of cold stores and supermarkets displaying empty shelves.
Bahrain Consumer Protection Society chairman Majeed Sharaf urged people to report any violation by calling the industry ministry’s Consumer Protection Directorate hotline on 17007003.
“Some cold stores and businesses started stocking cigarette cartons since last week anticipating an increase in prices and were selling them at higher prices which is against the law.
“Consumers should be aware of their rights and not pay extra unless new prices are officially announced.”
Mr Sharaf said the businessmen’s sole motive is to make profits with social responsibility coming second.
“All they want to do is make money but in the end it is the consumers who are exploited. This is unfair especially when people are already suffering from the impact of slumping oil prices leading to an increase in fuel prices and the impending lifting of subsidies on water and electricity.
“We urge people in Bahrain to contact the Consumer Protection Directorate hotline which is operated round the clock to receive complaints.”
As for the alcohol prices, top officials from the hospitality sector refused to reveal their plans though some did confirm that they were holding meetings to decide on when and how to introduce the new rates.
“There is lot of confusion and the hoteliers are hesitant to question any decision taken by the authorities,” said a member of the Bahrain Four Stars Hotels Committee.
“However, we cannot run the tourism sector like this, based on decisions taken without consulting the hospitality sector.”
He said in the coming weeks, consumers will have to pay more for alcoholic beverages at hotels and restaurants.
“For example, a beer can cost BD5 instead of BD3, while a glass of 30ml whiskey can cost BD6 from BD3 in some four-star properties.
“But all this is being debated right now and a final decision has not been reached.”
An official from a five-star hotel told the GDN that they had agreed on new rates for different beverages but they will be announced in the coming days.
“Hotels buy stocks that last them a month and now most of them have placed orders for new consignments which are expected to cost more.
“Consumers will not immediately feel the pinch as it takes time to update the menus, clear the old stock and update the billing system incorporating the new rates.”
According to official data, Bahrain imports beer, wine, whiskey, rum, gin, vodka and other liquors.
The data compiled by the Central Informatics Organisation also states that cigarettes worth $193 million were imported last year.
sandy@gdn.com.bh
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