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Monopolies in Qatar To Be Shut Down by Government

Qatar : 30 May 2011

Soon the companies with exclusive dealerships in foreign goods and services will lose that exclusivity, as Qatar works to be rid of monopolies in business while creating the free market economy the nation is pushing towards.

At this week’s State Cabinet meeting drafts of important amendments have been proposed for legislation (law number 8 of 2002) affecting the legal authorities given to exclusive dealerships.

The QNA (or Qatar News Agency) reported that the amendments proposed at the Cabinet meeting are working towards one objective. That goal is to have a system that includes multiple commercial entities dealing in the same goods or services.

This system will create healthy competition within the various companies dealing in similar goods and services, which will in turn lead to fair prices and a higher level of quality for consumers in the region.

Once the amendments are approved by those in higher positions and put into play, there will no longer be exclusive dealers of items such as air conditioners, cars, cigarettes, electrical appliances and electronics, as well as soft drinks, toiletries and many other things used in mass quantities.

It remains to be seen exactly how this new law, once it is put into effect, would deal with the fact that many foreign manufacturers will only deal with one dealer in Qatar’s small market. Local media spoke to an inside source at a Japanese car dealer who stated that besides this problem, certain foreign manufacturers will also need large workshops in place, as well as facilities for after-sale services, before they would be able to seek an agency, as is required.

In the case of vehicle manufacturers, this would mean billions of dollars in investment, according to the source who added that Japanese manufacturers are interested in securing more dealers in order to enhance sales in Qatar. Companies in Japan remain in the recovery stages after the disastrous effects of the tsunami.

Qatari businessmen are welcoming the end of monopolies, stating that this move is beneficial to consumers as well as retailers, who are currently at the mercy of the commercial agencies they deal with.

This marks the second time in the last few years that the Qatari government has put aside recommendations from the Advisory Council stating that the rights of exclusive dealerships should not be stripped. The government has decided to move forward with the amendments in the interest of the public.

A market observer stated that this is a “people-friendly” direction for the government and puts the interest of the common man over those of a few dealers.

The above amendments have been fiercely fought by the Advisory Council, who represent the private sector and are working on behalf of the QCCI (or the Qatari Chamber of Commerce & Industry).

Changes to the sponsorships laws have also been opposed by the QCCI. These government decisions regarding monopolies have created a level of optimism in groups that are hoping to see the current sponsorship systems replaced by an improved system, according to observers.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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