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What to Know
- The UAE has temporarily exempted essential goods and services suppliers from certain competition rules to allow cooperation during emergencies, effective until 16 June 2026.
- Businesses can coordinate logistics, production and supply area allocation, but price coordination, bid-rigging and artificial shortages remain prohibited in all circumstances.
- Companies relying on the exemption must notify the Ministry of Economy within 15 working days of any covered agreement taking effect.
Background
In our previous updates, we summarised the key changes introduced by Federal Decree-Law No. 36 of 2023 on the Regulation of Competition (the New Law) and the notification thresholds established by Cabinet Decision No. 3 of 2025. The Ministry of Economy and Tourism (the Ministry) has now issued Ministerial Decision No. 96 of 2026, dated 16 April 2026 (the Ministerial Decision).
Applicability
The Ministerial Decision came into force immediately upon issuance and expires on 16 June 2026 (being two months from the date of issuance). The Minister may extend this period by further decision if the exceptional circumstances necessitating its issuance persist. This is of direct relevance to businesses involved in the supply, production or distribution of essential goods and services in the UAE.
‘Essential Goods and Services’ are defined as those necessary to ensure the continuity of the daily lives of the population and the stability of markets and supply chains in the UAE, the interruption or disruption of the supply of which would result in serious economic or social consequences. This includes: (i) foodstuffs and essential consumer goods (wheat, rice, flour, sugar, vegetable oils, dairy products, meat, poultry, fish, eggs, bread, canned food products and bottled water); and (ii) transport and logistics services (maritime, air and land freight services, port services, storage services, refrigerated transport services and essential goods distribution services). The Ministry may, in coordination with the relevant authorities, expand this list by designating further goods or services as essential.
‘Agreements and Categories of Contracts Covered by the Exemption’ are defined as agreements, arrangements or concerted practices between undertakings operating in the relevant markets, the purpose of which is to ensure the continuity of the production, supply or distribution of Essential Goods and Services during emergency situations, provided that such agreements, arrangements or practices do not result in the elimination of, or substantial impairment to, competition in the relevant market.
The Exemption and Its Scope
Pursuant to Article 11 of the New Law, the Ministerial Decision temporarily lifts certain prohibitions of the New Law (Articles 5(1)(b), 5(1)(d) and 5(2)(a)) that would otherwise prevent businesses from cooperating on the terms of sale, production arrangements and the allocation of supply areas, but only where such cooperation is strictly directed at maintaining the production, supply or distribution of Essential Goods and Services (the “Exemption”).
Under Article 2 of the Ministerial Decision, the Exemption applies only where cooperation between establishments is: (i) necessary and proportionate to address emergency situations or exceptional circumstances; (ii) intended to ensure the availability of Essential Goods and Services in the markets and to maintain market stability in exceptional circumstances; (iii) limited to the extent necessary to achieve the legitimate objective; and (iv) not resulting in the exclusion of competitors or causing harm to consumers in the medium or long term.
Permitted Cooperation
Where those conditions are satisfied, Article 3 of the Ministerial Decision provides that businesses may cooperate in the following ways:
- Logistics: coordinating terms of sale, purchase or service performance as necessary to ensure the continuity of the supply including: (i) coordinating transport and distribution arrangements; (ii) determining mechanisms among points of sale; (iii) coordinating supply or delivery schedules; and (iv) standardising technical or logistical requirements necessary to ensure continuity of supply;
- Production and Marketing: reorganising production, distribution or marketing operations as necessary to ensure the continued availability of Essential Goods and Services including: (i) redirecting production capacities towards essential goods; (ii) cooperating in the use of storage or transport facilities and sharing logistical resources; and (iii) temporarily reallocating distribution areas to ensure market coverage; and
- Allocation of Supply Areas: on a temporary basis, allocating supply areas or customers as necessary to ensure that Essential Goods and Services reach all regions of the UAE, provided that: (i) the allocation is temporary and limited to the duration of the exceptional circumstances; (ii) the purpose is to ensure market coverage and prevent shortages; and (iii) the allocation does not result in the exclusion of other undertakings from the market or hinder their entry.
Absolute Prohibitions
The permitted cooperation mentioned above is tightly bounded and the following remain prohibited in all circumstances:
- any price coordination of any kind, including prices, discounts, costs, profit margins, whether directly or indirectly through systems or algorithms;
- any cooperation resulting in market dominance or the exclusion of competitors from the market;
- bid-rigging or collusion in tenders, auctions or bids;
- the artificial creation of shortages of goods or services or their concealment or stockpiling without lawful justification;
- any cooperation that adversely impacts consumer rights, price levels or the availability of goods and services; and
- conduct that restricts the free flow of goods or services, including through unjustified stockpiling, abstention from dealing or the artificial creation of surplus leading to unrealistic pricing.
The Ministerial Decision also requires that all cooperation under the Exemption must be temporary in nature and must not exceed what is strictly necessary to address the exceptional circumstances. Undertakings must cease any arrangements promptly once the circumstances that necessitated them no longer persist, except to the extent otherwise determined by the Ministry or the relevant local authority.
Notification Requirement
Businesses wishing to rely on the Exemption must notify the Ministry via email to competition@moec.gov.ae (or other relevant competent authority) within fifteen (15) working days of the relevant agreements entering into force or immediately upon request by the Ministry, whichever is earlier. The Ministry may request further information to verify compliance and may suspend the implementation of any agreement pending that verification.
Businesses should also be aware that the Ministry may at any time suspend, amend or revoke the benefit of the exemption if it establishes that an agreement or practice results in adverse effects on competition, consumer interests or market stability.
Undertakings that have benefited from the Exemption may continue implementing arrangements or agreements concluded pursuant to it, to the extent necessary to dispose of or sell inventories accumulated during the exemption period, provided that such continuation does not exceed three (3) months following the expiry of the exemption, does not prejudice the conditions and controls set forth in the Ministerial Decision, and does not harm competition or consumers.
Sanctions
Businesses that fail to comply with the Decision’s conditions face administrative sanctions and potential criminal liability under the New Law. The Ministry may also suspend, amend or revoke the Exemption at any time if the relevant arrangements are found to produce anticompetitive effects.
What This Means for Your Business
The Ministerial Decision provides a meaningful but tightly drawn window of relief for businesses managing supply chain disruptions. Businesses operating in the supply of foodstuffs, essential consumer goods and logistics and transport services should promptly review their existing and proposed arrangements to determine whether they can benefit from the Exemption.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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