Mixed response to MoIT circular on milk prices

A new circular that allows traders and importers to set retail prices of milk products for children below six years has not been well thought out and will be difficult to follow, enterprises say.

However, several experts have welcomed the new regulations as a move that will promote transparency and protect consumers while respecting the rights of businesses to self-determine prices.

The circular, issued by the Ministry of Industry and Trade (MoIT), is set to take effect on Thurday.

Under Circular No 08/2017/TT-BCT, enterprises and co-operatives producing and importing milk products and food supplements for children under six years can fix retail prices for their products on their own, but they have the responsibility to declare and register these with the MoIT.

The new circular covers domestic producers, importers, distributors and retailers of milk and supplement products containing milk.

Firms will also have to announce their distribution system to the ministry so that authorised agencies can ensure that the milk products are being sold at the set prices.

After considering acceptability of the prices registered, the MoIT will disseminate these as well as information about the distribution system of each enterprise and co-operative among local management offices so that the latter can co-operate with the ministry in supervising prices at the retail stage. The management offices include the local industry and trade departments, market watch and inspection departments and taxation offices

Prices of dairy products sold in the distribution system of enterprises and co-operatives should not be higher than the registered prices, the circular says. Registered prices can be changed within a bandwidth of 5 per cent (up or down), but prior information of the changes should be given to the State agencies with due explanations.

Do Thu Hien of Ha Noi, who owns a milk distributing business on Minh Khai Street, said she usually sold milk products to “tier-1 agents,” who would then sell them to smaller stores and retailers.

“It is very difficult to list out all the agents, as I can not follow the whole distribution process, not to mention that the operation of small-scale stores is often unstable, they can adjust their purchases weekly,” Hien said.

A representative of the Nutrition Nutricare Company Limited agreed, saying petty traders with modest business operations are likely to be confused about where to register and declare their distribution system. This process could waste the sellers’ time, he said.

During a meeting held on Thurday in HCM City by the MoIT to provide guidelines on implementing the circular, participants expressed several other concerns.

Nguyen Van Dung, a representative of the Food Safety Department under the Ministry of Health, said there were just five days for milk traders to carry out registration procedures (after they receive the forms from concerned agencies), which was too short a time. This should be extended he said.

“There will certainly be a large number of applications of firms submitting the registration forms to the State management agencies. If the management agencies fail to handle the cases, the cases will pile up and remain unsolved,” Dung said.

Khuat Quang Hung, a representative of the Nutritional Foods Group (NFG) under The European Chamber of Commerce (EuroCham) in Viet Nam, applauded the Circular 08.

Hung said the circular sets out a new direction which focuses on management of the distribution system and the final retail prices, ensuring market transparency and consumer interests while respecting the right of businesses to self-determine prices. — VNS



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