The prices of coffee, this trendy drink in Algeria, have risen sharply in recent months. This led the government to intervene, initially announcing three measures to deal with rising coffee prices. Then, the executive took action this Wednesday, August 21.
One of these measures, taken by the government at the end of last July, concerns, in particular, the “capping of profit margins for imports, wholesale and retail distribution”.
The rise in coffee prices has affected not only the products marketed for households but also the cups of coffee prepared in popular cafeterias. A year ago, a cup of coffee was sold for between 30 and 40 dinars. It then increased to 50 dinars at the start of the year. It reached 60 dinars in certain cafeterias this summer. For capsule coffee, it can reach 500 dinars per cup, as at Algiers airport or in certain chic neighborhoods of the capital.
The government sets coffee prices and profit margins
Algerians are among the biggest consumers of coffee in the world. Each adult consumes, in fact, between 3 to 4 kg of coffee per year. Thus, an average of 130,000 tonnes of coffee is imported each year by Algeria, for a bill of 300 million dollars.
In recent weeks, the 250 g packet of coffee has been sold in convenience stores at more than 400 DA, or more than 1,600 dinars per kilogram, a level never reached before. According to the National Statistics Office, the price of coffee increased by 30.6% during June 2024 compared to the same period of 2024.
On Wednesday, an executive decree, relating to the capping of the consumer price of coffee and profit margins on imports, was published in the official journal, which should put an end to the increase in prices of this product on the market locally.
The purpose of this decree is to set the ceiling price of coffee for consumption and the ceiling profit margins for importation as well as for distribution, at the wholesale and retail stages,” stipulates the decree signed by Prime Minister, Nadir Larbaoui.
In detail, the ceiling prices for coffee, all taxes included, for consumption, are set at 1,250 DA per kilogram for green or roasted or ground “Arabica” coffee and at 1,000 DA per kilogram for green or roasted or ground coffee. “robusta”.
This means that the 250-gram packet of robusta coffee will cost 250 dinars instead of 420 or 430 Algerian dinars. For Arabica coffee, the price of a 250-gram packet is set at 312.5 dinars.
Here are the profit margins applicable to the importation and distribution of coffee
In addition, Executive Decree No. 24-279 of August 20, 2024, emphasizes that the profit margin applicable to the importation of green coffee intended for resale is capped at 3%, calculated based on the value in customs.
The profit margin applicable to products from imported green coffee intended for processing is capped at 4%, calculated based on the cost price, the decree further indicates.
The same document also concerns the capping of profit margins applicable to the distribution of coffee at the wholesale and retail stages.
Regarding wholesale distribution, the profit margin is capped at 4% for green or roasted or ground “arabica” and “robusta” coffee. The maximum profit margin at the retail distribution stage is set at 8%.
The executive decree stipulates in this regard that “the operators concerned must, each according to their activity, communicate the selling prices of coffee for import and distribution at the wholesale and retail stages”.
Furthermore, to guarantee the maintenance of consumer price ceilings, set by the government, “compensation is allocated to importers of green coffee, from the State budget”, we can still read in the document. In other words, the government subsidizes the price of coffee, a widely consumed product, but which is not a basic necessity.
