C.P admits ‘unreasonable egg price hike’

C.P Vietnam Livestock Corp. on has admitted it had unreasonably increased chicken egg price from VND21,500 to VND29,500 per ten-egg carton and promised to adjust the price in the next few days.

C.P Vietnam Livestock Corp. has admitted it had unreasonably increased chicken egg price from VND21,500 to VND29,500 per ten-egg carton and promised to adjust the price in the next few days.

A customer is buying eggs at Co.op Mart in HCM City

The HCMC Department of Industry and Trade had a meeting with C.P at its headquarters in Dong Nai on Monday in order to figure out the reason why C.P has constantly raised egg prices since the year’s beginning.

Speaking to the Daily after the meeting, Le Ngoc Dao, deputy director of the department, provided data showing that egg supply for the HCMC market was sufficient, and thus undersupply could not be used as an excuse for egg price hike.

A representative of C.P reportedly said at the meeting that from January 4 to 11, the firm had raised price of chicken eggs from VND21,500 to VND29,500 per carton, or an increase of VND8,000 a carton within seven days. The representative admitted this was an unreasonable move and said C.P would soon adjust the price.

Because C.P general director did not attend the meeting on Monday, the firm will give its official feedback on Thursday. The specific price reduction will be provided on that day.

Prior to January 1, C.P supplied eggs to supermarkets at VND21,500 per carton. Given the cost of buying eggs from farms at VND15,500 a carton, C.P earned a profit of VND6,000 from each carton, said Dao.

“From now to the Lunar New Year 2013, egg prices will be kept at VND23,500 per carton. Therefore, C.P should adjust prices to below this level,” she said.

A farm owner currently working for C.P informed it costs VND1,500 to produce an egg, which is sold to C.P at VND1,550 under a long-term contract.

His farm supplies around 110,000 eggs to C.P every day. As he has signed a long-term contract, he cannot raise selling prices, even though farm owners in Dong Nai and Binh Phuoc are selling eggs at high prices.

Meanwhile, owner of a farm in Dong Nai said he is selling eggs at VND2,500 each, while the production cost is VND1,400 an egg.

The egg price hike of C.P has led to higher prices quoted at other companies and farms. Therefore, the HCMC trade department supposed that major livestock firms were joining hands to push up prices, and if so, they are violating the Competition Law.

This Friday, the department will have a meeting with Emivest, another large egg supplier for HCMC. In case the company failed to explain why it raised prices, the department would propose the Vietnam Competition Authority under the Ministry of Industry and Trade and the General Department of Taxation launch a price inspection.