Wholesalers in Daraa Governorate are controlling food prices and speculating against retailers, by opening the door for citizens to buy foodstuff directly, eliminating the profit margin for retailers.

Although citizens benefit from purchasing at lower prices from wholesale stores, they also suffer from the control of wholesalers of food prices with each rise in the exchange rate of the Syrian Pound (SYP) against the US Dollar (USD), amid the government’s inability to control the prices of food supplies.

Speculation against retailers

Abdelkareem Hamza, owner of a grocery store in Muzayrib town in the western countryside of Daraa, told Enab Baladi that wholesale stores open their doors to citizens individually and sell them food at the same price as the selling price to retailers.

Grocery owners leave a profit margin between the price of the commodity from wholesale stores and the price of selling it to the citizen. However, the people go to wholesale stores to save this profit margin of groceries, according to Hamza.

Wholesale foodstuff stores are characterized by a large capital, which enables the store owner to buy items in large quantities at lower prices. Wholesale stores usually sell goods to retailers at a price that generates a profit to their owners within the profit margin earned by the seller.

Mohammad al-Mustafa, owner of another grocery store in Daraa, pointed out that the owners of wholesale stores have a large capital and they import goods from the capital Damascus, at wholesale prices and in large quantities. He stressed that they are “speculating” against the “retail” sellers by selling items to citizens at prices similar to selling prices to groceries, contributing to the domination of a small group of wholesale stores of the entire market.

After the Syrian regime regained control over the southern region in May 2018, it has opened and facilitated roads towards the capital Damascus, which helped traders reduce the cost of transporting goods from Damascus and the rest of the country; and thus, goods have become largely available. However, fluctuations in the price of the SYP and some traders’ monopoly over certain goods adversely affected trade movement, the items’ availability and prices.

Wholesalers do not deny what grocery owners say. A young man working in a wholesale store told Enab Baladi that wholesale stores seek to sell their products, whether to retail stores or individuals. “In the end, the store owner seeks to sell and earn a profit. We sell in retail and in packages. There is a turnout of individuals seeking to buy full supplies from wholesale stores.”

Abdelkareem Hamza said that wholesale stores are not supposed to sell the goods in retail, but in packages, clarifying that he sells a kilogram of sugar at 325 SYP, but individuals buy it from wholesale stores at 300 SYP.

Prices rise with the fluctuation of exchange rate, but do not decline

Enab Baladi monitored the prices in wholesale stores after the rise, in September, of the exchange rate of the SYP to 700 per USD. It found that store owners raised prices in line with the depreciation of the pound. However, after the exchange rate fell to 580 SYP per USD, the prices remained the same rather than falling.

When Enab Baladi surveyed a number of wholesalers about fixing prices, they responded by saying that they bought the commodities during the rise of the Dollar.

The Director of Internal Trade and Consumer Protection, Omar Awad, told the Syrian News Channel (al-Ikhbariyah) on 4 October, that the directorate toured wholesale and retail stores in the city of Daraa, confirming that there is a “near-total commitment to prices” by wholesale stores, as he put it.

Awad’s statements were described by people, who Enab Baladi met, as “insufficient.” They pointed out that these tours are limited to the city center of Daraa only, and that there is a clear absence of ration control for the rural areas in Daraa Governorate. They added that there is no control over the prices of stores in general, not even when it comes to fraud and expired goods.