Almarai co., Saudi Arabia's largest food producer, was forced to reduce its milk prices after one week of online protests over an "unjustified" increase in prices.
The company, co-owned by Prince Sultan bin Mohammed bin Saud Al Kabeer, has announced today its compliance with the Ministry of Commerce and Industry resolution which Sunday warned dairy companies against arbitrarily increasing prices of fresh milk and laban packs.
“In compliance with the Resolution issued by the Ministry of Commerce and Industry, Almarai is taking the price of its 2 litre fresh milk and laban pack sizes in the Kingdom of Saudi Arabia to the level that prevailed on 29 Rajab 1432 AH [1 July, 2011] with immediate effect,” a statement on its company website reads today.
“However,” the statement goes on,“ Almarai believes that the rationale and justification for the price increase is still valid. We will continue to work with the relevant government authorities to address this issue.”
The crisis started on 3 July, when Almarai Dairy Company unilaterally raised its price, a hike of about 14 per cent on a two-litre bottle of fresh milk, which is now being sold for SR8, instead of SR4, saying milk production costs have jumped because of the rising price of raw materials like feedstock, which has gone up by 40 to 60 per cent in the last year. The price of packaging material has also gone up by about 30 per cent, in addition to the higher wages for workers, and higher maintenance and operation fees.
However, online campaigners were not convinced by the dairy producer argument.
Over the last week, social networkers used the hash tags #mara3i, #StopMara3i and a Facebook page, calling for a gulf-wide boycott.
Under the slogan “Let their milk rot,” internet users uploaded many photos featuring stores in Saudi Arabia overloaded with Almarai products, signs of the sharp decrease in sales of the company’s different products due to the nationwide boycott campaign.
“Usually, companies raise their prices if it suffers losses,” the Facebook page statement reads. “Well, this is absolutely not the case for Almarai, one of the biggest Saudi companies in terms of revenue. Why does it want to raise profits? Is it willing to form an economic empire at the expense of the crushed citizen?”
Angry members posted their comments to mobilize Saudis to join the campaign.
“They exploit us by increasing prices and consumer protection doesn’t turn a hair,” Abdul Aziz Al Qobeishy said on “together to face the greedy Marai.”
Another Facebook user, Yasser El-Harbi, said “Go on people and AlMarai will remain an unforgotten lesson for vendors in different sectors.”
News that AlMarai has restored its pre-3 July prices was met with cheers by users.
“People talk and walk,” commented Haifona Alotibe. “God willing, power to the people,” Faisal Al-Arabi, another user commented.
Another user Haneen Tisdale seems less impressed by the decision.
“Arab peoples topple regimes and Saudi people topple companies,” she said.
The AlMarai boycott is the second successful online campaign in Saudi Arabia, after the one mobilizing for a revolution against the regime in March failed.
Starting in May Saudi women have been mobilising for the “Women2Drive" campaign demanding the right for women to drive and travel freely in Saudi Arabia and urging females with international driver’s licenses to use their cars on 17 June, to defy decades-old driving ban.