Fri. Nov 25th, 2022

VietNamNet Bridge – Despite a lot of efforts, the watchdog agencies still
fail to control the formula prices. The market remains chaotic because of low
quality products and sky high prices.

Vietnam, formula price, control, market, policies, tax

A wave of indignation has been raised among consumers who have found out that
the sale price of a kind of formula imported from France is 3-4 times higher
than the cost price.

Meanwhile, other formula brands have also raised their product prices by another
10-15 percent after raising the prices many times before.

The Ministry of Industry and Trade, which conducted a survey on the formula
prices in Vietnam and other regional countries, has found out that Vietnamese
consumers have to pay 20-60 percent higher than Thai, Malaysian, Indonesian,
Singaporean, South Korean consumers. In some cases, the price gaps are 100-150
percent.

Especially, there always exist a big gap between the import prices and retail
prices. The gap is 242 percent for Enfa Grow A+ of Mead Johnson, 285 percent for
Dugro Gold of Dumex, while the gaps of 220-246 percent have been reported for
Gain, Pedia Sure, Ensure of Abbot.

Meanwhile, price experts have affirmed that there is no reason for formula
manufacturers to raise the sale prices. The material price has been unchanged
for the last many months, while the input costs have been stable. A kilo of full
cream milk is imported at VND90,000, while skimmed milk is VND80,000. A 900g box
is believed to have the cost price of VND120,000-130,000, while the retail price
is VND250,000-510,000.

The representative of Mead Johnson brand, explaining the 10 percent price
increase, attributed to the changes in the package design, affirming that this
is not because of the input cost increases. Dumex has also given the same
explanation.

In fact, the reason has been many times cited by formula distributors to explain
their decisions on raising retail prices. However, analysts said this is just a
trick played by the distributors to raise the sale prices without legitimate
reasons.

Under the Price Law, from January 1, 2013, enterprises have to report to the
watchdog agencies about any adjustments to the prices of the formula products
for under-6-year-old children. As for other products, the watchdog agency only
controls over the price posting to ensure that the products as sold at the
posted prices.

Therefore, distributors have changed their products from “milk powder” to
nutrient food, or supplement food in order to report the price adjustments to
the watchdog agencies.

As a result, the management agencies cannot examine to find out if the price
adjustments are acceptable and reasonable. Anfalac A+ for 0-6 months old
children, or Anfakid A+ for 3-year-old children and higher, for example, show on
the packs that they are nutrient products.

Meanwhile, formula distributors explain that the changes in the names of milk
products have been approved by the Ministry of Health. The milk products,
especially for small children of less than six months should be considered
“supplement food,” while breast milk should be the main source of nutrition for
children.

In this case, there exist the disagreement between the Ministry of Health and
the Ministry of Health, which has put consumers at a disadvantage.

Experts have also pointed out the unreasonable things in the current management
mechanism. The Ministry of Industry and Trade is in charge of controlling the
market, while the Ministry of Finance in charge of controlling the prices.
Meanwhile, there always exists a close link between the market and the price of
products.

An Ninh Thu Do

By vivian