The retail industry in Oman
Retail & Consumer Focus
Ahmed Al BarwaniPartner,Head of Office - Oman
Awad El SharifSenior Associate,Dispute Resolution
The retail industry in Oman is regulated through various laws and regulations by different bodies in Oman that include mainly the Ministry of Commerce, Industry and Investment Promotion and the Consumer Protection Authority. Retail in this context is mainly concerned with the sale of goods or services from a manufacturer, supplier or distributor directly to the consumer. It is the last step in the supply chain. A retailer is any business entity responsible for the final sale of goods to the consumer.
Maintaining quality and performance standards in retail reduces the risks that retailers or international brands may be exposed to; maintaining these standards creates consumer confidence and increases their loyalty to the brand, through consumer goods guarantee services, testing, inspection and certifications by accreditation bodies in order to ensure compliance with safety regulations and legal regulations. The supply chain starts from the manufacturer responsible for producing finished goods using raw materials, labour and technology, followed by wholesalers that buy goods from manufacturers and sell them in bulk to retailers and finally retailers that sell the finished products to the consumer which stops the commodity movement.
Retail goods may be sold directly to the consumer through traditional stores and supermarkets or through automated vending machines or through online sales in what is known as electronic stores such as amazon.com, through social media platforms, smartphone applications or by mail. Goods in these cases are sold at comparatively lower prices since retailers do not incur the usual expenses and retailing of services takes place by providing services rather than tangible goods.
The importance of the retail sector in the Sultanate of Oman lies in its close connection with consumers’ livelihood. The sector has flourished due to the change in daily lifestyle, the system of unifying salaries and an increase in the minimum wage has led to a rise in consumer spending and increased confidence in the market. The demand has increased in emerging markets and the number of incoming tourists has increased. According to a report by Colliers International, the number of tourists in the Sultanate of Oman increased by 13% between 2018 and 2021 and residents and citizens moved towards a more modern lifestyle. The Sultanate has expanded in retail in recent years, which has attracted investors into business from around the world and the Gulf Cooperation Council countries to open shopping centres in most cities of the Sultanate, which were built with innovative designs and high specifications such as: Mall of Oman, Muscat Grand Mall, Al Araimi Boulevard, Mall of Muscat, Lulu Hypermarket, Carrefour and others.
Firstly: Royal Decree 66/2014 Promulgating the Consumer Protection Law, issued on 30 November 2014:
This decree regulates the rights of the consumer and the duties of the supplier of the commodity and prohibits the derogation of any such rights to the contrary as null and void. The decree prohibits the advertisement or circulation of any commodity or providing any service before fulfilling all conditions related to health and safety and obtaining licenses or approvals from the concerned authorities. It also obligates the supplier to warn the consumer in writing, in both Arabic and English languages, with the correct way of using the commodity and the methods of dealing with any harm to the consumer or his money that may result from using the commodity in an incorrect manner. The decree also prohibits advertising or trading any adulterated, corrupt, imitated or unauthorised commodity in accordance with the standards of the regulation.
The decree further adds the right of the consumer to obtain the correct information for the commodity that he buys or uses, such as the price, weight, production date, expiration date, material name and components, country of origin, specification number or service details that he receives in accordance with the regulations and to obtain an invoice in Arabic proving his purchase of the commodity or service with the basic information on it and the commercial establishment confirming its commercial registration number on any correspondence, invoices and commercial advertisements when dealing with the consumer.
The decree also aims to limit price increase in the event of a crisis, a natural pandemic or exceptional market conditions with the approval of the Council of Ministers and provides the consumer with the right to freely choose any commodity or service and a right to guarantee the quality of the commodity and service, to obtain the commodity or service at the declared price and everything that guarantees the consumers health and safety when obtaining the commodity or service. The decree gives the consumer the right to demand fair compensation for any damage incurred by him and his money as a result of obtaining or ordinary use of the commodity or receiving the service and to represent the consumers best interests when preparing policies for consumer protection, and the right to respect the religious values, customs and traditions of the consumer when providing him with any good or service, the consumer also he has the right to replace the commodity or return it and recover its value without any additional cost within (15) fifteen days from the date of receiving it. The provider and advertiser shall be committed to transparency and credibility and shall refrain from false or misleading advertising when promoting the commodity or service it provides to the consumer. It shall also guarantee the service provided to the consumer within a period of time commensurate with its nature. Otherwise, the provider shall be obligated to refund the value of that service or compensation for the deficiency or perform it again properly.
The provider shall immediately upon discovering a defect in the commodity which could harm the consumer or his money, stop trading the commodity and is required to notify both the consumers who have purchased the commodity or received the service with the defect, as well as the concerned authorities of this defect, provide potential damages and how to prevent its occurrence and immediately withdraw the defective commodity from the market. The provider is obligated to enable the Authority’s employees who are authorized to have the status of judicial officers to exercise their legally prescribed powers, and to facilitate the performance of their work. Any violations shall be dealt with administratively or judicially, as the case may be. The Public Prosecutor may, at the request of the President or his delegate, decide to temporarily close the facility or stop the activity until the case is resolved, and this decision may be appealed before the Court of Appeal in the Consultation Room. The crimes set forth in this law shall be punishable, according to each violation, with imprisonment, penalties and monetary fines or any of them. In addition to ruling of the penalties, imprisonment and fines, the competent court may rule to confiscate or destroy the commodity subject of the crime and the materials and tools used in it at the expense of the convict or to stop the activity or close the shop where the crime occurred, temporarily or permanently.
Secondly: Royal Decree 53/2011 Promulgating the System of The Public Authority For Consumer Protection, issued on June 2011:
The Public Authority for Consumer Protection (the “PACP”) aims to protect the consumer from price fluctuations, monitors the prices of goods and services in the market and limits any increase, ensures the consumer’s freedom of choice, equality, fair treatment, honesty, and credibility. It also raises public awareness among the consumer by using sound means to disseminate it on a correct and balanced basis among all segments of society, finding quick solutions to consumer complaints, combating commercial fraud and counterfeiting and fighting monopoly, encourages the establishment of consumer protection associations and working to support them.
The PACP also helps in developing plans and action programs to protect, promote and develop consumer rights, study proposals and recommendations that come to the authority in relation to consumer rights, prepare research and studies related to consumer protection, propose appropriate systems and rules to regulate markets, work to implement laws and regulations related to consumer protection, and represent the Sultanate of Oman in various conferences and meetings regionally and internationally related to its competencies.
Thirdly: Ministerial Decision 1/2022 Amending Some Provisions of the Executive Regulation of the Consumer Protection Law, issued on 14 March 2022.
The decision permits the consumer to submit a complaint to the competent department by filling out a form prepared for this purpose, accompanied by evidence and documents supporting the complaint. The competent department must decide on the complaint within 30 days from the date of its complete submission. The consumer has the right to replace or return the goods and recover its value without any additional cost, or to repair it if it is defective, or if it does not conform to the standard specifications or the purpose for which the goods were contracted. Every condition that exempts the supplier from its liability towards the consumer is null and void.
The decision prohibits the trading of commodities that are indecent or violates public morals or customs and traditions that affect faith and religion. The supplier must obtain approvals from the concerned authorities before conducting any promotions and discounts to ensure that there are no misleading offers or advertisements and to provide the authorities with a copy of the approval, and a statement of the prizes, gifts and advantages that may be offered to the winning consumers, indicating the selling price before and after the offer, attaching sales invoices before making the offer, and providing a list of the number of goods available for each type that they wish to set discounts on.
The Sultanate paid attention to the development of the retail sector and consumer protection, as it encouraged attracting investors to the field of retail. The Sultanate also witnessed a qualitative and quantitative leap in building retail spaces according to the latest and finest specifications. On the other hand, the Sultanate has a legislative system for regulating and protecting consumer rights and regulating the obligations of the supplier in order to achieve justice and equality.
For further information,please contact Andrew Fawcett or Ali Abbasov.
Published in April 2023
