The caretaker Minister of Economy and Trade. (Credit: ANI)
Lebanon’s supermarket owners have been waiting over a year for permission to price their items in dollars— a measure that will go into effect Wednesday.
Caretaker Economy Minister Amine Salam originally opposed the move but changed his mind at the beginning of 2023 given Lebanon’s ongoing economic crisis and the rapid depreciation of the national currency against the dollar.
The lira hit another record low yesterday, trading at LL85,000 to the dollar on the parallel market.
The new dollarized pricing will make it easier for supermarket owners to price their products and work out their expenses and profits. It will also generate more transparency for consumers.
Here are the rules for the new dollar pricing:
- Prices of imported products, and products charged to supermarkets in dollars by suppliers, will be displayed in dollars, while those produced locally — such as cigarettes, bread, or fruits and vegetables — will remain displayed in the lira.
- The dollar-to-lira exchange rate used by supermarkets will be visibly and prominently displayed at store entrances, cash registers and on receipts. If the dollar-to-lira rate changes during the day due to a large market fluctuation, supermarket owners must inform customers by changing the rate on their displays.
- Customers can pay in the currency of their choice. If the customer pays in lira, the bill is calculated according to the rate displayed by the store. If the customer pays in dollars, the supermarket can give change in either dollars or lira.
- The existing rule of 50 percent payment in cash and 50 percent payment by credit card remains in effect.
However, some questions remained unanswered to both supermarket owners and consumers, which is why L’Orient-Le Jour met with Salam:
What platform will the supermarkets use to set their daily lira-to-dollar rate?
They can use everything: mobile apps, websites, and messaging groups. Nothing is mandatory. However, most supermarket owners have told us that they would prefer aggregating all the rates from the different platforms at a given time to make an average (using applications such as the Lira Aggregator, for example).
Will your ministry intervene in the supermarkets’ choice of such rate?
No. As a government entity, the Economy Ministry still considers this rate to be unofficial, despite the fact that the national market is growing on this basis.
However, starting Wednesday, I will visit supermarkets to verify that they are applying the new dollar pricing properly and operating in accordance with the decision I have made in consultation with the union of supermarket owners.
Won’t this create tension between customers and supermarket owners if they see differences between the rates?
No. On the contrary, it will create competition between supermarkets to keep the most competitive rate. We offer supermarkets the right to price in dollars from a referenced dollar-to-lira rate. We also give them the freedom to lose customers if they play with that rate.
As for customers, they will be able to monitor the rates of each store themselves and have the choice to go to one or the other depending on the rate applied. Until now, consumers had no control over the displayed prices and no transparency on the applied rates.
How will the Consumer Protection Directorate (CPD), which is attached to your ministry, supervise the proper application of this decision throughout the country, given its lack of resources?
The CPD has limited resources. There are still about 60 inspectors who do a great job despite their meager salaries and lack of transportation.
Nevertheless, they are out in the field every week and are supported by Internal Security Forces.
Our biggest challenge at the moment is to address the more than 1,000 municipalities in the country that refuse to apply Article 72 of the Consumer Protection Law — “due to a lack of resources,” they say — namely the mutual assistance between municipalities and the Economy Ministry to monitor the market.
If each municipality offered the help of one of its officers, we would have more than 1,060 inspectors to control the market and track down offenders. Our main objective is always to protect consumers.
This article was originally published in French in L'Orient-Le Jour. Translation by Sahar Ghoussoub.
Caretaker Economy Minister Amine Salam originally opposed the move but changed his mind at the beginning of 2023 given Lebanon’s ongoing economic crisis and the rapid depreciation of the national currency against the dollar.The lira hit...