Supermarkets default on payments to industry

Foodstuffs manufacturers and
wholesalers demand better laws

Foodstuffs manufacturers are calling for a new law to regulate their dealings with supermarkets to curtail instances of default in payment. The Syndicate of Lebanese Food Industries submitted a draft law in this regard to the Ministry of Economy and Trade on Monday (September 24).

“Traders and industrialists are both facing difficulties in dealing with supermarkets, especially foreign ones,” said George Nasraoui, the syndicate's president. Retail stores and supermarkets often buy products from manufacturers and wholesalers on credit. He said retailers are defaulting on their payments: “Whenever there is political turmoil, they just stop paying their bills.” The draft law stipulates the need to have a written contract between the two parties. “The contract obliges retailers to pay their dues within a certain time frame,” said Nasraoui.

Nabil Fahed, the president of the syndicate of supermarket owners said regulating the retail sector should be made from within, through agreements among the stakeholders. "The syndicate delegated a foreign firm to conduct a study for organizing the sector six years ago. We gave the study to the Ministry of Trade, but didn’t realize any progress on this matter,” he said.

Fahed said the proposal included measures to avoid the monopoly of a huge supermarket chain, and promote the profitability of small-scale retailers.

Nasraoui had also called on the ministry to take steps to protect the industry in light of deteriorating economic conditions. He said industrial exports have declined by some $100 million in the first nine months of the year from the same period last year.

Nasraoui called on the authorities to help local manufacturers participate in international trade exhibitions. “The government should also support industrialists through subsidies on fuel and energy fees,” said Nasraoui. He said prices of fuel are much cheaper in competitor Arab markets, mainly in the Gulf.