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UAE: Corruption rife in Dubai hotel F&B supply chain

10/1/12  www.hoteliermiddleeast.com

By Loise Birchall

Receiving departments can be bribed by fruit and vegetable vendor to receive less, according to one hotel purchasing manager
Receiving departments can be bribed by fruit and vegetable vendor to receive less, according to one hotel purchasing manager

Bribery in the sale of poor-quality food and beverage products to hotels in Dubai is common, industry sources have told Hotelier Middle East.

Yesterday, Hotelier Middle East reported that the head chef and the butcher at the Burj Al Arab were being tried in court for taking kickbacks of nearly AED 900,000 in return for buying poor-quality food at inflated prices from four suppliers.

“It’s getting quite bad; it makes it really difficult to do business. For somebody that doesn’t have deep pockets or is not open to these unethical practices, it is very difficult,” commented one Dubai-based Halal-food supplier, who asked to remain anonymous.

He said the suppliers were driving the practice of offering kickbacks: “But these individuals in the hotels shouldn’t buy into such unethical practice, and they’re the ones encouraging it by accepting it,” he added.

A Dubai hotel purchase and cost control manager, who did not wish to be named told Hotelier: “Kickbacks are not only in food and beverage, but also in engineering, pre-opening projects, purchase of furniture fixture and equipments and operating stocks and equipments.

“Kick backs are received in all levels. For example how many financial controllers make it a point to check engineering-related items? Did they check their prices in the market? Were these really needed? To whom were annual maintenance contracts awarded? These are higher kickbacks,” said the manager.

“Lower level employees, for example the receiving clerk who is in-charge of receiving goods. He can be bribed by a fruit and vegetable vendor to receive less. If the order was for 35kgs of tomatoes, then he would be receiving only 25kgs physically whereas the invoice would show 35kgs. These are some of the examples and there are more,” he added.

Former Taj Hotel Dubai executive chef Joe Vock also claimed that bribery was a “problem” in the market.

“It affects all hotels here as a lot of them aren’t buying the best product that is available because the guys are taking kickbacks, especially in the purchasing departments.”

Marcus Dudley, director of food and beverage, Moevenpick Hotel Jumeirah Beach, said he personally hadn’t been offered a bribe.

“But we had suspicioun about six months ago that one of our employees was involved in that, but no proof and we called in about five different suppliers and asked them directly and of course they said ‘no’ and were highly offended, whether they were involved in it or not,” he said.

Dudley attributed part of the problem to some hotel purchasing and receiving procedures in this part of the world.

“Traditionally in hotels you’d have a purchasing department and the purchasing manager oversees the receiving, but in our hotel that’s completely different.

“We have a purchasing manager who reports to the finance director and the receiving department is independent to the purchasing manager and reports as well to the finance department, so the guy who’s buying the things is not receiving the things, the two don’t meet.”

However, the hotel has recently introduced procedures to help prevent potential scams.

“We have introduced this year that – from sales and marketing contracts to food and beverage contracts – there needs to be a minimum of two signatures from a company’s side, where as before any one manager could do a deal and sign off. It’s a safety mechanism,” said Dudley.

Ibn Battuta Gate executive chef Tunji Oladipo, who has worked in Dubai for 11 years, asserted that such corruption is not a new problem in the emirate’s hotel sector.

“It’s always been the case everywhere, when I worked in London it was the same situation, it’s just become a little more aggressive recently because all the suppliers are going down the same route, supplying the same type of things – there aren’t a lot of specialist items.

“There has always been a lot of supplier buttering up, not so much bribes with money – but gifts and things like that and now they are a little more aggressive,’ added Oladipo.

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