Experts say controlling advertisements will help ease formula prices

Experts believe that the key problem that makes formula prices sky high is that enterprises spend too much money on advertisements. Therefore, they think in order to ease formula prices, it is necessary to keep strict control over expenditures for advertisements.

Despite a lot of efforts, management agencies still have not found the proper way to control formula prices. Formula prices are still much higher than that in other regional countries. The Ministry of Finance has recently revealed that it may apply a new regulation to control formula prices, under which enterprises will have to register sale prices to management agencies.

However, the tentative plan has immediately raised controversy.

“The most important thing now is not to force enterprises to declare and register sale prices to management agencies, or set up ceiling prices on formula products. In order to control formula prices, we need to control the expenditure on advertisement,” said Dr. Nguyen Thu Hien from the US Mexico University.

According to Hien, there are thousands of sale agents and retailers in Vietnam, and if Vietnam sets up ceiling prices on formula products, this will only affect sale agents, not foreign powder milk companies. As products are being distributed through many different levels, it is very difficult to control the sale prices.

Hien also said it would be unreasonable to set the ceiling profit for enterprises. In principle, enterprises pay more tax to the state if they make more profit. Therefore, the best solution for controlling formula prices is to control enterprises’ advertisements. It would be easy for management agencies to total up the average expenditure on advertisements and set reasonable levels for advertisement expenditure.

If so, enterprises will no longer try to spend much money on advertisements but will try to improve the product quality instead.

A nutrition expert said that there are problems in controlling the authenticity of advertisements about food products. A tea product is being advertised on TV and newspapers that it can “cleanse the body,” though no experiment has been conducted to confirm this. Formula products are also advertised as helping children grow clever and tall. All parents want their children to become clever and tall, therefore, they buy the products even when they have to spend much money on them.

Under the current laws, advertisers have to submit their advertisement pieces to the Food Safety and Hygiene Department under the Ministry of Health for consideration. However, the agency did not see many advertisement pieces, which are not scientifically reliable. Tien phong newspaper’s reporters could not contact leaders of the Food Safety and Hygiene Department to ask about the issue.

The department’s head Nguyen Cong Khan assigned deputy head Nguyen Thanh Phong to work with reporters. Meanwhile, Phong said that only the department’s head has the right to make statement. If newspapers want to get information, they need to send dispatch to the department and wait for written answers.

While management agencies still have not made any survey on the formula market, some market survey firms have released their surveys, which say Abbott brand products are now accounting for 32.6 percent of the powder milk market, while Dutch Lady has 25.5 percent, Mead Johnson has 10.9 percent and Dumex has 5 percent. As such, foreign dairy producers are dominating the domestic powder milk market, holding nearly 90 percent of the market share.

In the latest news, FrieslandCampina has announced the 5 percent price increase for liquid Dutch Lady brand products by six percent. The price of a 180 ml carton has increased from 4,500 dong to 4,750 dong. – Tien phong

Tags: Vietnam Dairy sector, Vietnam formula prices