A new law becomes active next month, aiming to prevent unreasonable price hikes for imported milk. However, it has prompted companies to do just that.
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| Choosing to buy domestic milk products is one way to protect customers interests |
Circular No 122/2010, which has just been issued by the Ministry of Finance (MOF), is a regulation requiring that dairy companies must register imported powdered milk prices for infants under the age of six with the MOF\'s Price Management Department or the provincial departments of finance.
Since the new regulation will only come into effect from October 1, some companies have taken the short period between its announcement and its application to increase their milk prices again.
As of September 1, the milk price of Abbott’s Ensure Gold brand has gone up by 10%. The price of each 900 gram tin of Ensure Gold has gone up from VND430,000 ($21.8) to VND471,000 ($23.9). The price of each 400 gram tin of Ensure Gold has gone up from VND218,000 ($11.1) to VND230,000 ($11.7).
From September 7, the milk price of Abbott’s Pediasure has risen by 9%. The retail price of each 900 gram tin of Pediasure is now VND429,000 ($21.8) and each Pediasure 1.8 kilogram tin now costs VND729,000 ($37).
Also, from September 1, the milk price of New Zealand’s Anmum has jumped by 10% from VND125,000 ($6.3) to VND134,000 ($6.8) for each 400 gram tin and from VND225,000 ($11.4) to VND240,000 ($12.2) for each 900 gram tin.
In August, prices of most imported milk products surged. For example, Abbott’s milk prices went up by 7% on 3 products including Similac Eye-Q Plus, Similac Gain Eye-Q Plus and Gain Plus Eye-Q Plus.
In July, Dumex also increased its 17 powdered milk product prices by 10%. The price of XO milk from the Republic of Korea went up by 2.5% and prices of Dutch Lady’s liquid milk and condensed milk went up by 7%.
According to the Vietnam Chamber of Commerce and Industry (VCCI), the prices of powdered milk products sold in Vietnam have increased 16 times in the last 3 years. Milk producers and importers had attributed higher exchange rates and input costs to the rise in milk prices.
Nguyen Lan living in Thanh Xuan District, Hanoi said, “Blaming higher exchange rates to push up milk prices is unreasonable.”
Do Gia Phan, General Secretary of the Vietnam Association of Standards and Consumer Protection said that the price growth rate of dairy products in Vietnam is currently much higher than the growth of exchange rates. However, there still has not been any research to identify whether the reason to price changes made by milk producers were warranted.
According to existing regulations, milk importers in Vietnam are not responsible for reporting their price components to functional authorities. A study conducted by the MOF revealed that price tags of many milk products were calculated by adding import prices with 40-45% of gross profit margin.
According to a report provided by the Hanoi Market Management Bureau in 2009, the difference between imported prices of several powdered milk products and their price tags is 220-285%.
According to experts, the move by the MOF is very necessary to control milk prices in the current conditions where milk importers keep pushing prices up. However, experts caution that the move can only force milk companies to report their price components and how they calculated price tags in the market. The new law cannot control imported milk price tags.
Thanh Lan living on Hai Ba Trung Street, Hanoi shared, “I do not often buy imported milk products because I find that the quality of locally manufactured milk products is as good as imported milk products and their prices are more stable. However, sometimes the prices of domestic milk products go up 3-5% due to the domino effect of the price increase of imported milk products. ”
A man who has two small sons appealed, “It’s time for Vietnamese consumers to protect their interests by boycotting companies that unreasonably push up their prices.”
