Corruption rife in Dubai hotel F&B supply chain

Posted by: Jean
10 Jan 2012
Food of thought for Arab owners who prefer to employ an European and pay them highly, finally they are the one who get bribes or advise their colleagues to go ahead. In almost every country Chef has more influence in purchasing or finalising, however, final inspection is always through procurement department. Let me share the truth which every hotelier knows; procurement/purchasing is the only department which welcomes the bribes in hotel since they are the one who know the market very well but they keep themselve silent and upon successful deal they get their own comission safely, and something happens then the person from Kitchen who was dealing directly with 3rd party gets in trouble.. However, even if F&B people have more influence, they should respect the trust which their company & owners have shown on them. In China trend is changing now, owners are keeping a very strong control over European management due to the corruption done by them over the past couple of years. Read any chinese blogs you will find more than 100 different news where European GM/Chef's or DOFB's were involved in comission and were caught. Chinese owners keep special attention over European Management since they believe; "We pay them highly and they still cheat with us, we guess they are trying to help their bad economy situation by getting bribes from here" Above is not my statement but some well known hotel owners in China. And I was in China too with some of my colleagues, I happen to see the same strange stories where GM was much concerned about purchasing than business & operation. Waooooo, well done European colleagues, you are ruining your image.

Posted by: Andre
11 Jan 2012
I am glad that Hotelier Middle East is finally talking about a taboo subject that makes the market corrupted. Lets be aware, a control and honest Receiving and Purchasing department can drive an additional 5-8% Net Result for the hotel. Cost controller is a key position in hotel industry as this person is in charge of rate variation, food consumption, food wastage and makes calcul to determine appropriate food cost. How many of those positions are filled? I would love to see your magazine making an article on those Revenue Heroes in hotel. Without cost controller, the door is largely open for dirty practices not only in F&B, but as you say Engineering, IT Services (call centre cost, phone system, servers, computers), Housekeeping Amenities products, Indoor/Outdoor Furnitures (beds, mattresses, linens, sunbeds), so its sad to say but the whole market is concerned. It's always surprised me that the cost of construction of a hotel room (5-star) In Dubai is higher than in Europe. Inserting a cost to import(25%) and a cheaper labor workforce, something is wrong. The answer: overbilling and bribes. Now when it comes to cheating clients with low quality food products turned as high quality buffet, that's annoying especially when you pay a buffet for AED 199 (USD 55). The consumer is totally ripped off on such practices. I think in your article, the supplier name is missing. This practice is also largely proposed b suppliers in UAE, because it's an old practice. Suppliers should be ban as an example for a period of 6 months, because placing a fine (they can always pay for it). It is not the supplier employer who maintains this, its the entire supplier organization whether foods, engineering, IT or else.

Posted by: Honest Jack
11 Jan 2012
I wonder when the same will happen at Emirates Flight Catering!!!! EKFC is one of the most corruption infested companies in the UAE. It is amazing the amount of leverage some suppliers have at EKFC!!!!! It is shocking that a company would appear professional on the outside but when you look closely you would be shocked!!! Imagine we are able to sell to them through a third party but not direct! We have been told this straight to our face!

Posted by: Alberto
11 Jan 2012
Dear Jean, Andre and Jack, do you think that the corruption is also in purchasing electronic automation system for hotel? and so any it is in any field about hotel? thanks. Albe, from Italy.

Posted by: Jammike
11 Jan 2012
What abuot companies that offer free training travel around the world just to sign contract and implement their own the` or coffe or other products. There is not much control around Dubai, just do not step on somebadys foot. My grandma always said " Is not always gold everything that shines".

Posted by: N-B
12 Jan 2012
Thank you Hotelier Middles East for highlighting a practice that widely exists in the market. F&B outlets and their business owners are losing dearly because of this practice: if a supplier can afford to offer bribes to get the business, that means he can equally offer more competitive/lower prices to the customer. We are an F&B supplier and have decided from day one that offering kickbacks/bribes is unethical. Believe me we have had and are still having very difficult times with some big names/high-end outlets because we are not willing to offer any kickbacks. On the other hand we have so many honest customers that really care about their employer. One thing we have noticed: the more the owner and board of director/executives are involved in the operation, the less probability theres is for such unethical behavior. Background checks on candidates (regardless of nationality) and strict control in the operation are key to pushing out kickbacks and other unethical practices. In my place there is saying: "money left unattended invites others to steal it".

Posted by: weiserite
12 Jan 2012
The hotels in DXB and other places indeed are cesspools of corruption in their F and B. I am delighted about this expose. What you need to do now is take a look at sweetheart relationships the supermarket purchasers of fruit and vegetables have with the Dubai wholesalers and importers in Al-Awir Fruit and Vegetable Market - the same ones who corrupt the F and B people. The corruption is is all but institutionalized. I know because I am a vegetable grower in the region who has for many years seen bribes and kickbacks determine what gets distributed and sold first. I have seen bright eyed representatives of produce companies from all over the world visit here, naively trying to introduce their products based on quality and service, and walk away disappointed and disgusted because the last thing these local clowns look at is that thing called quality. Their first and most important question to you is what you can do for them personally. It is blatant. They have no shame and they need some good swift kicks in their sitting muscles.

Posted by: Sanju
25 Jan 2012
Hi Corruption & thefts are there in every filed , but can be minimized if the organisation is manged properly. For example, purchase department should not be allowed to handle the purchase department alone, thats why we have cost controllers to monitor their activities. Market survey should be done without fail. But most of the hotels are not giving much importance to the cost controllers, & most of the hotels are recruiting cost clerk or cost accontant, to reduce the salary or cost. This is a very wrong decision by the management. If the cost controller is strong & well experience, pilferage & corruption can be stopped 90%. By recruiting a cost clerk , he can only give the figures what is appearing in the system & cannot go deep in detail. With my experience i can assure that most of the corruption & pilferage in the purchaing department , stores, kitchen can be stopped by a well experineced cost controller. Even the purchase of engineering items can be controlled if the cost controller has a fair knowlegde of the items , So my opinion is to select a good cost controller, them implement the best procedures , so that purchase, store , kitchen & engineering department can be contolled .