BMI's Executive Summary

[TOP]

With the pressure of soaring commodity costs being felt by food and drink producers throughout the world, the Bahraini industry is struggling to deal with these issues. Rising commodity prices are being even more sharply felt as the value of the Bahraini currency falls along with the dollar, to which it is pegged. Although cutting interest rates will ease the pressure for revaluation in the short-term, the dollar peg issue cannot be ignored forever. Indeed with the Gulf Cooperation Council (GCC), excluding Kuwait, still holding out and refraining from revaluing their currencies, inflation could push even higher in 2008 and in the medium to long-term the five remaining states will need to reconsider their respective currency policies and move away from the dollar peg. Food price inflation continues to be a significant concern and many continue to speculate what the government plans to do to address this, particularly after the Saudi government moved to increase subsidies.

The Bahraini food and drink industry already survives through heavy government subsidies, with the government spending over US$29.2mn in 2006 alone on subsidising the cost of meat, chicken and flour. The government's rationale for such high subsidies is that these are needed in order to combat the rising cost of living and ensure a high standard of living for its citizens. As the government sets the price for many staple goods, these often do not reflect the actual global costs, with the government making up the difference. However, these subsidies do not cover all food and drink products, and consequently, the price for many food items has shot up, with the government absorbing part of the impact.

A number of global factors have converged to lead to major increases in the prices for foodstuff throughout the world. The increasing demand for agricultural products from a growing middle class in developing countries such as China and India, which are now more able to afford imported food; poor growing conditions in the US, Australia and Europe, which are all major wheat producers; and a new emphasis on biofuels, which has spurred demand for key crops. These rising prices have been even more acutely felt in Bahrain, which is highly dependent on imports to meet its food and drink needs.

Given its ecological restrictions, Bahrain is highly dependent on food and drink imports to meet the needs of it population. While the government has made some efforts to rectify this, the reality is that there is little that can be done, due to the climate's unsuitability for most forms of agriculture. The island receives minimal rainfall and accordingly, annual harvests and outputs are highly dependent on whether the sector has been fortunate enough to receive favourable weather conditions that year. Given this high level of vulnerability to global markets and trends, the Bahraini consumers will inevitably start to feel the pressure from the dollar's decline and rising commodity costs, despite the government's best efforts to cushion them from this.

Contents

[TOP]

Chapter 1 – Business Environment

Table: Middle East Business Environment Rankings

SWOT Analysis

Bahrain Food & Drink SWOT

Bahrain Political SWOT

Bahrain Economic SWOT

Bahrain Business Environment SWOT

Macroeconomic Outlook

Table: Bahrain - Economic Activity

Chapter 2 – Retail

Regional Overview – Discount Retailing

Table: Discount Store Sales in US$bn

Table: Key Players in Discount Retail

Industry Forecast Scenario

Table: Bahrain MGR Sales Value by Format – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview – Bahrain

Table: Structure Of Bahrain’s MGR Market By Number Of Outlets

Table: Bahrain Mass Grocery Retail Sales - Value by Format - Historical Data & Forecasts

Chapter 3 – Food & Drink

Dairy In The Middle East

Table: Milk Production By Volume (tonnes)

Table: Key Players

Industry Forecast Scenario

Table: Food Consumption Indicators – Historical Data & Forecasts

Table: Bahrain Sectoral Trade Balance – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview – Bahrain

Table: Bahrain Agricultural Sub-Sector Production

Chapter 4 – Tobacco

Industry Developments

Market Overview

Chapter 5 – Competitive Landscape

Key Players

Table: Key Players in Bahrain’s MGR Sector

Table: Key Players in Bahrain’s Food & Drink Sector

Regional Company Case Studies

Lulu Company Profile

Table: Lulu Outlets

Ülker Company Profile

Table: Ulker

Table: Ulker’s Regional Presence

Regional Food & Drink Case Study – Aujan Industries

Tables: Aujan Industries – The Figures

Table: Aujan Industries Production Facilities In Saudi Arabia

Table: Aujan Shareholders

Mecca-Cola’s Performance in the Middle East

Table: Mecca-Cola Global Presence

Table: Mecca-Cola – The Figures

Company Analysis

Bahrain Flour Mills Company (BFMC)

BMI Forecast Modelling

How we generate our industry forecasts

Retail Industry

Sources

Competitive Landscape for Middle East & Africa Food & Drink Reports: Sample of  
Companies Ranked

[TOP]

At-a-glance perspective on the strengths, weaknesses, opportunities and threats facing each market’s food & drink industry. BMI also provides similar economic and business environment studies. Company SWOTs (Strengths, Weaknesses, Opportunities, Threats) covering all leading food and drink companies operating in each market, including competitive intelligence on geographic presence and competitive positioning of multinationals against local companies; leading products, services and brands; sales and local market share; foreign direct investment, projects, partners and acquisition strategy. Illustration of the industry via rankings tables comparing revenues, number of outlets, number of employees and registration dates. BMI analyses each company’s performance, market position, strategy and investment potential.

Network of Middle Eastern & African Food Sources

[TOP]

BMI's Middle Eastern & African Food Reports are based on an extensive network of multilateral organisations, government departments, food industry associations, chambers of commerce and company reports. Information sources include: