What to know about ‘Price Label’ decree issued by supply ministry

CAIRO – 24 December 2017: Minister of Supply Ali Moselhy issued a decree on Tuesday obliging manufacturers and importers to put price labels on products. The decree stirred a lot of debate.

Mainly, the decree aims to achieve market control, and combat monopoly.

The following are the main points in the seven-article decree:
1) All manufacturers, importers, and suppliers are obliged to issue tax invoices including all data on products traded. A tax invoice is an invoice issued by a registered dealer to the purchaser, showing the amount of tax payable with the purpose of availing an input tax credit, and it is issued when commodities are sold with the purpose of resale.

2) The data must consist of the products’ types and quantities as well as factory price and the manufacturer’s suggested retail price (MSRP).

3) The prices must be clearly indicated in Arabic and in a non-removable way for all food products. It is possible to add prices in a foreign language.

4) The consumer price MUST be written on the pack itself, on a price tag on the pack, and on the shelf at retail markets and shops.

5) It is prohibited to sell at a higher consumer prices than what is indicated in the tax invoice.

6) Suppliers and retailers must keep the documents indicating the sources of the products they possess.

7) It is prohibited to exchange or possess products of unknown sources or without documents indicating their sources for commercial purposes.

8) The supplier should provide other suppliers or retailers with an invoice indicating the deal and its date as well as the type, price, and quantity of products traded.

9) The decree is put into effect on January 1, 2018.

10) Any products that do not follow these rules will be confiscated once the law is enacted.

The supply minister issued a decree in the Egyptian Official Gazette late October stipulating that “all food producers, importers, packagers and suppliers of food products must label every product in Arabic and in a clear font that cannot be erased.” The price label decree stipulates that violations could result in jail sentences of up to five years, fines and confiscations.

“This decree is non-implementable and illogical,” Secretary-General of the Federation of Egyptian Chambers of Commerce Alaa Ezz told Egypt Today on December 13, adding that the decision will face major challenges.

He said, for manufacturers, final prices inevitably differ from governorate to another. For example, major companies producing milk transport their products by their own means of transportation and therefore the costs will change from Cairo to North Sinai. That triggers a question of how these companies can fix prices nationwide.

For the importers, Ezz said they make deals on the long term. An importer may sign a contract to import commodities with an arrival time of about three months, “how can he then fix prices in light of the unstable situation of dollar?” He added that the decree must include only retailers who are not manufacturers or importers.

“This contradicts the mode of operations of many factories and results in complications in the production process,” said Hani Berzi, the chairman of Edita Food Industries, one of the country’s largest food producers to Reuters in October.

Berzi listed producing in bulk, different pricing for exports and different locations as well as extra costs for labeling as challenges manufacturers would now have to deal with in their businesses.