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.
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
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at christian.siodmak@gmail.com. Many thanks.
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