Improper management policies have created huge rip-off possibilities in the market place for imported baby formula, which is putting more burden on local parents.
According to the statistic from the General Department of Vietnam Customs, the import price is only USD4-5 but the retail price is as high as USD20-43.
“Consumers have always had to bear the sky-high advertising costs.” Mai Thanh Tong, Vice President of the Accounting Association in HCM City, said. Advertising costs of imported baby formula ranks second, just behind cosmetic products. On top of this there’s the commission fee for experts, who are paid to recommend the use of certain milk powders.
According to the current laws, enterprises are only allowed to spend 10% of their revenues on advertising, but in reality, the percent might reach as high as 40%. The advertising helps firms imprint their brand names on consumers’ minds.
A consumer said, “There’s only imported formula milk at hospitals. My child is already used to the milk so I can’t change the brand now.”
Experts said Vietnamese people prefer foreign products so enterprises have taken advantages of the situation to fix the prices. “Vietnamese mothers like foreign milk formula and with the effects of advertising, a few companies can monopolise the market and fix prices.” said Nguyen Tien Thoa, secretary of Vietnam Valuation Association.
In the mean time, Nguyen Anh Tuan, head of Department of Price Management under the Ministry of Finance, said these products are not under their control so they have not carried out any inspections. Enterprises have classified these products as food supplements and nutritional products to avoid the department’s price stabilisation policies.
“If we change the standards and names now, we’ll have trouble in price stabilisation of milk products that were once called food supplements or vice versa.” Tuan said.
The Department of Price Management said they are working with Food Safety and Hygiene Department, part of the Ministry of Health, to extend the stabilisation policies over food supplements and nutritional products.
Until the proposal becomes real, and prices are stabilised, the costs will continue to increase–the cost for milk powder has already increased five times in the last six months.
Đăng ký: VietNam News
