x Abu Dhabi, UAEFriday 21 July 2017

Ban on small cans of Coke and Pepsi is reversed

The Ministry of Economy moved to clarify the dispute over 300ml cans of Pepsi and Coca-Cola yesterday, allowing their sale in hotels, restaurants and leisure establishments.

ABU DHABI // Tourist hotels and restaurants have won the right to continue selling Pepsi and Coca-Cola in smaller-sized 300ml cans.

The decision ends a week of confusion during which one hypermarket chain, LuLu, cleared its shelves of Coca-Cola cans because it thought it might be breaking the law.

The result, after the personal intervention of the Minister of Economy, Sultan Al Mansouri, is that regulation of the sale of soft drinks has returned to where it was a week ago.

The dispute began when consumer-protection officials at the ministry said they had received complaints from the public, and accused soft-drinks distributors of reducing the size of the cans to 300ml while continuing to charge the fixed price of Dh1.50.

The Consumer Protection Division also said the 300ml cans lacked both a printed price-tag and a label in Arabic listing ingredients, which are required by the consumer protection law.

The distributors protested that the 300ml cans were for sale only in hotels, restaurants and leisure establishments, and were exempt from the Dh1.50 fixed price.

Dubai Refreshments, Abu Dhabi Refreshments and Al Ahlia Gulf Line said ordinary retail outlets were supplied only with 355ml cans of Pepsi and 330ml cans of Coca-Cola, and that any shop selling 300ml cans must have obtained them improperly.

Nevertheless, the ministry ordered that all the smaller-sized cans be withdrawn from sale everywhere, including hotels and restaurants, and gave the distributors a month to comply.

At the LuLu hypermarket chain, executives said the order was unclear as to whether only 355ml cans were legal, and began clearing 330ml Coca-Cola cans from the shelves as a precaution.

"Based on this decision by the Ministry of Economy, we are removing Coca-Cola cans of 330ml from our shelves pending a final decision from the Government," said V. Nanadakumar, spokesman for the group.

The decision to reverse the ban on 300ml cans followed a meeting on Thursday between distributors and the ministry.

The Dubai Department of Economic Development (DED) and Sharjah Department of Economic Development (SDED) said the minister, Sultan Al Mansouri, had intervened to settle the issue.

In hypermarkets, supermarkets and convenience stores, Pepsi will continue be sold in cans of 355ml and 330ml for Coca-Cola. Both cans will continue to display the price, which remains Dh1.5.

In hotels, restaurants and leisure establishments, where drinks are always sold for more than Dh1.5, the cans will continue to be sold in 300ml sizes.

"The use of 300ml cans in hotels is necessary due to their different standards of storage and distribution," said Omar Bushahab, chief executive of the commercial compliance and consumer protection division at the DED.

"Hotels rely on international standards and their pricing is also different from other outlets that are not subject to the 10 per cent municipality fees as in the case of hotels."

Mr Bushahab said that if hotels were forced to use cans of a different size, they would need to rearrange their distribution mechanism and change their systems, which would require time and investment.

The ministry said it was "likely" some 300ml cans earmarked for export had been leaked into the retail market.

Khalifa Misbah Al Ketbi, director of the control and protection of trade department at the SDED, said a label saying "for export only" should be printed on 300ml cans to avoid confusion and clearly display that they should be sold only in hotels and restaurants and for export.

"It will give authorities better control over the markets and ensure that products meant for exports are not diverted to local retailers and department stores," he said.

Both Pepsi and Coca-Cola increased their retail prices in January last year for the first time in 20 years, from Dh1 to Dh1.50 for a can.

The distributors applied to the Ministry of Economy to raise prices in response to inflation, rising petrol and salary costs, and a steep rise in sugar prices.

rjones@thenational.ae