Iraq flag Iraq: Buying and Selling

The distribution network in Iraq

Evolution of the Sector
Iraq is divided into two main regions; the semi-autonomous north administered by the Kurdistan Regional Government (KRG) and the central government administered center and south of the country. Iraq’s retail sector is dominated by the public sector, especially for food products. In tandem with strong economic growth there is a growing demand for modern, western-style supermarkets especially in Iraqi Kurdistan. Iraq’s Ministry of Trade (MOT), through the Public Food Distribution System (PFDS), continues to provide the Iraqis with five basic food commodities at subsidized prices.

With agricultural production in decline, food imports have become critical. State-owned companies channeling imported foodstuffs to consumers have in the process become the major operators in the Iraqi food retail sector. Iraq’s Foodstuff Trading Co., imports and markets basic food items such as sugar, vegetable oil, and infant formula. Similarly, the Grain Board of Iraq (GBI) imports and distributes rice. The State Company for Grain Processing mills GBI wheat and distributes flour to the Iraqis through state programs. Fresh milk is collected and processed by the State Diary Company; dairy products are marketed in retail outlets in Baghdad and neighboring areas.

To help combat the import of low quality product, the Central Organization for Standardization and Quality Control (COSQC) implemented in 2011 a new pre-shipment inspection program. The Pre-Importation Inspection, Testing and Certification (PITC) program inspects products at origin and issues certificates of conformity for qualifying products imported by the private sector. The PITC program has however contributed to increased exporter and importer costs, which are transferred to consumers. Reportedly, the PITC program adds $5,000 per container for beef and poultry shipments. Retail food prices have doubled since May 2011.
Iraq’s largest food trade partners are Turkey (mainly processed foods, fruits and vegetables, and wheat flour) and Iran (livestock, vegetables and fruits) followed by Saudi Arabia, Egypt, Jordan, and Syria.
Market share
According to The Iraqi Chamber of Commerce, there are some 100,000 registered private food retailers in Iraq, and around 200,000 unregistered small retailers. Retailers purchase mainly from wholesalers.
The main stores channels are: Carrefour Hypermarket ; City Center Hypermarket (Hewa owned stores); Warda Supermaket ; World Mall Supermaket. The major wholesaler is Khudairi Group.
Nationwide, there are several thousand government-supplied Public Food Distribution System (PFDS) stores where the Iraqis receive subsidized basic foodstuffs, such as rice, flour, vegetable oil, and sugar. Product quality and availability in these stores is highly variable.
The Public Food Distribution System stores are not authorized to sell food products outside of the government’s ration card program.

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Latest Update: July 2022

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