Subsidized Products: How to End the Chaos?
Never in the country's modern history have the Lebanese been reduced to competing for powdered milk, oil and, to a lesser extent, sugar. Even during the worst moments of the civil war (1975-1990), supermarket shelves were full of products of all kinds, imported and local. Prices were certainly higher, but business was booming. It took the dollar to exceed the symbolic bar of 10,000 LL last weekend, in the midst of a political, economic and health crisis, for things to get out of hand. In the country's supermarkets, there are now fights between customers, for a sachet of powdered milk or a few liters of oil at subsidized prices. Prices are soaring, while wages are losing their value every day. Several videos illustrating this phenomenon are circulating and creating buzz on social networks. And, above all, shock deeply. So much so that angry outbursts are on the rise, with Lebanese once again blocking roads in protest at skyrocketing inflation and the rapid impoverishment of an already strained population.
Sold...barely on the shelves
In general, the demand for state-subsidized products is very high. Milk and oil are particularly popular because they are easy to store. “Even if it is two and a half times higher than before the collapse of the national currency, the price of a subsidized product is half of what if it were not supported by the state, explains to L 'Orient-Le Jour the Marketing Director of the Spinneys Group, Ralph el-Kahi. In this context, oil and milk, the two most sought-after products, are regularly out of stock. Regardless of the quantities delivered by distributors, these low-perishable products sell out quickly as soon as they are placed on the shelves. »
Away from the cameras, a Sri Lankan family suffers from the situation. Since the financial crisis accelerated, it has been impossible for them to get milk for their one-and-a-half-year-old son, which is sold only in pharmacies. “My neighborhood pharmacy turned me down. I had to go to almost six pharmacies. With always the same answer: no milk for 3rd age. My son only has milk for a few days,” worries his father, a foreign worker. Thousands of families, Lebanese or foreign, find themselves in the same situation, forced to beg to feed their children.
The main problem lies in the available quantities of subsidized products, which are clearly below market needs. Because the Banque du Liban has imposed severe restrictions on currency transfers, thereby curbing imports. “Everyone wants subsidized products. The demand is ten times greater than the quantities available. And although we are determined to serve our customers, we are unable to meet their demand", scolds Nabil Fahed, president of the union of supermarket owners, referring to a situation which has been dragging on "for a good month" at the risk of "putting in jeopardy jeopardize food security”. A problem all the more serious as the supermarkets were closed for 25 days due to total confinement. "The prolonged closure has hampered the proper functioning of the supply chain", laments Ralph el-Kahi.
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Inevitably, the situation has been exacerbated by the selfishness of some consumers, determined to build up stocks of subsidized products. “We are setting limits and rationing, as much as possible, because we have a duty to ensure subsidized food for everyone,” reacts Supermarko director Tarek Zeid. “The instruction is now to allow one bag of sugar per person. The same is true for milk and oil, if we have them, because the goods are delivered to us in dribs and drabs,” regrets the manager. A measure that many supermarkets are trying to enforce, with more or less success, because "customers are trying to stock up", when they still have the means.
The major brands of milk are delivered drop by drop to supermarkets. Photo A.-M.H.
Small traders excluded from subsidies
The opportunism of some of the customers is also a matter of debate. “Small traders (bakers, pastry chefs, grocers, caterers) not having the right to subsidized products, they swarm supermarkets to find them,” observes Nabil Fahed. "We recently dismissed a client who turned out to be a local grocer," says Tarek Zeid. He only bought oil or milk at a low price (subsidized) to resell it at double the price. The schemes are legion. In order not to be identified and recognized, free riders send relatives and friends. “One of them mobilized all the janitors in the neighborhood to buy subsidized products that were out of stock,” says Mr. Zeid. A situation that has prompted many points of sale to discreetly reserve missing products for their regulars and others to authorize the purchase of subsidized products only on the condition that the cart also contains non-supported products. Especially since the subsidized foodstuffs constitute a dead loss for the supermarkets which are obliged to sell them at a fixed price. “Illegal measures”, retorts Zouheir Berro, president of the Association for the Defense of Consumers. at low cost", according to Nabil Fahed. A question of importance with regard to professionals in the retail sector, but difficult to quantify.
This shows how problematic state subsidies are, and not only those concerning basic foodstuffs. So much so that Zouheir Berro denounces a “vast joke”. “These subsidies are distributed to importers on the basis of confessional balance and political clientelism”, summarizes the trade unionist who reports a measure “for the benefit of large traders and smugglers, rather than the disadvantaged population”. “Why then would cashews be subsidized? he says, referring to this luxury product that is not a staple. Supporting figures, Mr. Berro recalls that food product subsidies, “milk, oil and sugar in mind, only cost the state $250 million”. "The big share goes to fuels and medicines, a large part of which reappears abroad, in Syria, in Africa in particular", he says, revealing that the subsidies to these two sectors have cost the Treasury "no less than 8 billion dollars”.
Two oils from the same local brand, one subsidized, the other not. Photo A.-M.H.
Raise subsidies, a solution against smuggling
What solution in this context? “Change the system! End all subsidies without exception and distribute debit cards to the most disadvantaged families instead. It should only cost the Treasury a billion dollars and it will limit smuggling, ”insists the trade unionist who denounces corruption and state rot. "The consumer suffers, supermarket owners too," he says.
As a reminder
General subsidies are coming to an end. And after?
It is in this context that the Ministry of the Economy published a press release on Monday. If he warns against "the conditions imposed on the consumer" and "against any discrimination against customers", he nevertheless calls for the "responsibility" of consumers, asking them "not to rush on the goods subsidized”. Behind the scenes of the ministry, on the other hand, we are talking about "a plan on which the minister (outgoing, editor's note) is working", Raoul Nehmé, to find a way out of this chaotic situation, "together with the representatives of supermarkets". “Mr. Nehmé is a fervent supporter of a gradual reduction in subsidies, which should be accompanied by aid for disadvantaged families,” recalls Nabil Fahed. The minister had indeed presented a project to this effect, which was never adopted by the Council of Ministers. "It is necessary to move from a system of product subsidies to a system of support for families in need," argues Ralph el-Kahi. This “will avoid more incidents”, he hopes.
