The vast majority (92 per cent) of consumers are well-informed about the upcoming introduction of Value Added Tax (VAT) in the UAE, according to a recent report.

The report, ‘Behaviour & Sentiment: Understanding Food & Beverages', was conducted by the Food and Beverage Manufacturing Business Group (FBMG) in collaboration with leading global information and measurement company Nielsen.

Saleh Abdullah Lootah, chairman of FBMG, said: “The food-and-beverage sector is one the largest and most important economic subdivisions in the market today, not to mention that it gathers one of the biggest community of businessmen and women of any individual sector.”

“Furthermore, F&B is closely related to the economic developments taking place across the region and reacts to both expansions and recessions,” he said.

“With that in mind, we set out to examine the effects that the introduction of Value Added Tax at the beginning of 2018 will have on the sector,” he added.

Lootah continued: “We selected to focus on VAT in our report given, first and foremost, the importance of the tax itself as a tool to diversify and strengthen the UAE economy, but also because we believe it is paramount that we raise awareness about the upcoming tax in society at large, and within the business sector, in particular.”

“The results we measured in the report indicate an incredibly high level of awareness about VAT in society – businesspeople and consumers alike – as well as a great degree of understanding of its expected effects and outcomes,” he said.

“The F&B sector is effectively a microcosm of the general economy, which means this report can serve as a tool providing insight into public awareness of VAT in UAE society at large,” he concluded.

Respondents in the survey generally agreed that the new tax will decrease their consumption for some categories, most notably soft drinks, where 68 per cent claimed they will consume less of the product going forward, followed by chocolates (52.1 per cent), ice cream (47.2 per cent) and frozen foods (41.7 per cent).

On the flip side, however, participants expected their consumption of other categories to increase as the tax goes into effect: 21.7 per cent anticipated they will be drinking more water (though 70 per cent didn’t expect VAT to affect their water intake at all), while 18 per cent said they will consume more healthy foods, 17.8 per cent said the same of fruits and vegetables and 17.7 per cent for fish and seafood.

The report seeks to offer a solid and accurate foundation for F&B professionals and decision makers to develop ideas on where to invest and how best to serve the diverse consumer base.

As many as 1,500 online surveys were conducted with a nationally representative sample in October 2017. These polls canvassed UAE residents of all nationalities and backgrounds across all seven emirates. Almost two-thirds (63 per cent) of respondents were Asian expats to the UAE, while 20 per cent were Arab expats, 11 per cent UAE nationals, 3 per cent Western expats and 3 per cent from other backgrounds.

Established under the auspices of the Dubai Chamber of Commerce and Industry, the Food & Beverage Manufacturing Business Group (FBMG) seeks to create a platform for F&B manufacturers to resolve industry-related challenges and take the sector in the UAE to greater heights. Membership is open to any business operating in the food & beverage manufacturing sector in the country, it stated. – TradeArabia News Service