Qatar's packaged food industry is expected to take a severe blow following the announcement that Saudi Arabia, UAE, Egypt and Bahrain are cutting diplomatic ties over claims that Qatar sponsors terrorism.
According to Euromonitor International analyst Monique Naval, the packaged food industry in Qatar can be severely affected given the unprecedented event of those countries cutting ties with Qatar and Qatar’s heavy dependence on imports from GCC, especially from Saudi Arabia.
"Products from UAE and Saudi Arabia are market leaders in many food categories and on the assumption that cutting ties would include imposing of trading barriers, imported products can disappear from Qatari supermarket shelves in the very short period of time leading to shortages of certain food items and consequently spike of prices.
"This would normally open immediate opportunities from other countries to export to Qatar as experience from other countries shows (for example when Russia introduced ban on EU agricultural products as a response to EU sanctions to Russia, there were many international companies entering Russian market) but in the case of Qatar it might not be the case - due to the relatively small market size of packaged food in Qatar, there won’t be many new international companies incentivised to enter the market."
Shoppers in Doha were taking no chances on Monday despite Qatari officials reassuring residents there was no need to panic after Saudi Arabia imposed a de facto food blockade...
6 Jun 2017
Overall impact on GCC food trade will be quite limited, said Naval. "Qatar is small market, its packaged food retail sales contribute by less than 1% to total GCC sales which in 2016 are valued at $25 billion."
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