a "devastating" price war during the last few months,
surviving ice cream brands may have come together to firm up prices in
the local market, according to informed sources.
The withdrawal of at least one multinational ice cream brand from the
Gulf markets may have hastened the process, they added. Another
overseas brand might also take a decision on stepping out altogether,
the sources said.
The market has confirmed that the Swiss giant Nestle has stopped
production of its brands at a plant in Dubai since April. Sales of its
ice cream products, branded as 'Kimo', in Gulf markets have also
According to informed sources, the plant may still be operating as
leased capacity to third-party ice cream brands. There are also
indications that it may be put up for sale, though no confirmation was
available from any of the parties involved.
On its part, the Anglo-Dutch fast moving consumer goods (FMCG) major,
Unilever, closed its 'Walls' production at a plant in Dammam in Saudi
Arabia. The facility was supplying the Gulf markets. No details are
available as to whether Unilever plans to pull out Walls entirely from
Also, the partial removal of EU subsidies on dairy products, including
milk powder, may have played a part in the upward movement of retail
prices. One removal has already been implemented, and another may be
in the offing, said sources.
"The UAE market has passed through one of the must bruising price
wars in the ice cream and frozen desserts category. This was initiated
by leading local brands to counter the overseas brands, and from their
perspective, they have been successful in their aims," said a
senior manager with a local producer.
"Now we are seeing a sort of an informal grouping coming together
and firming up prices across the board. We are also party to these
discussions. Matters will be more clear in the next few weeks."
A senior source at Nestle said: "There were pertinent reasons why
we decided to pull out of the ice cream market in the region. But as a
company with a range of products in its portfolio, we will continue to
remain very active in the region as we have in the past."
Said an industry source, "In any case, the consumer here is the
loser, for he now has a lesser range to choose from. The local
economies which had these plants will also lose out to some extent
from the closures."