>> Price of powdered milk expected to increase in March
>> Milk prices go up 16 times in 3 years
Milk importers Mead Johnson Nutrition Vietnam Ltd. Co. and Nestlé Vietnam Ltd.Co. have been rapped for exceeding their advertising and promotional spending caps by billions of dong in 2010.
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| Many milk companies flaunt advertising regulations (Illustration photo) |
The information was released in a report issued by the Ministry of Finance.
Under Ministry of Finance regulations, companies are allowed to spend a maximum of 10% of their revenue on advertising, marketing, promotion, conferences and reception activities.
However, last year, Mead Johnson Nutrition Vietnam’s advertising and marketing expenses totalled VND114 billion (VND5.53 million) higher than the permitted level, with Nestlé Vietnam notching up VND181.4 billion (USD8.8 million) in PR overspending.
The two companies spent up to VND8.6 billion (USD417,475) advertising powdered milk products for children under the age of six.
Dang Ngoc Tuyen, Deputy Chief Inspector of the Ministry of Finance, said that if the milk importers took the initiative to cut their advertising and marketing expenses, they would not have had to raise their product prices.
He also admitted that the ministry lacked strict sanctions to deal with the violations.
The Finance Ministry’s report also indicated that milk importers had made no effort to set public retail prices for their milk products aimed at children. Instead, the milk importers only sold their products to distribution agents, and therefore were not directly responsible for the prices customers had to pay, as they allowed distributors to set retail milk prices.
The Ministry of Finance recently concluded an inspection of seven essential products, including powdered milk for children, liquefied gas, fertilizer, animal feed, cement, sugar and construction steel.
Milk is the only product on the list violating regulations on listed prices.
