Private dairy companies required to register prices

A draft circular to prevent excessive milk-price hikes by dairy firms is to be issued this month, according to the Ministry of Finance.

The draft will replace the ministry’s circular No104/2008-TT-BTC that became effective in 2008.

The draft will expand price-registration requirements to private and foreign dairies, which account for the majority of milk sold in terms of value in Viet Nam. Under the current circular, only State-owned dairies are required to register prices.

At the moment, authorised agencies have the right to stabilise milk prices if they increase by 20 per cent or more. However, they rarely do so as firms typically raise prices by no more than 5 to 10 per cent at any one time.

Nguyen Anh Tuan, deputy director of the Ministry of Finance’s Price Management Department said the regulations needed to be amended to rein in unreasonable price hikes by private firms.

“Milk is an essential foodstuff. It is not just Viet Nam, other countries also regulate dairy prices,” Tuan said.

In addition, he said the country needed to boost local milk supplies to reduce dependence on imports.

After a number of hikes at the start of 2010, milk prices rose by between 3-10 per cent at the end of July.

Meanwhile, the US Abbott Dairy Company announced on Tuesday that it planned to increase the price of some products by 7 per cent.

According to the Price Management Department, firms could not justify raising prices because the cost of imported dairy products was less at the end of July than in May.

In the first seven months of this year, dairy imports were worth US$432 million – a 60 per cent year-on-year increase, according to the General Department of Customs.

Meanwhile, the Ministry of Industry and Trade said the retail price of some imported dairy products was actually four times higher than the import cost.

Despite price hikes, firms producing formula milk and dairy products for babies – such as Mead Johnson, Nestle, Dumex and XO – still held a significant market share in Viet Nam, the Ministry said. — VNS

Taking interest in quality

Agencies authorised to monitor milk prices in the country have also been charged with monitoring quality.

After an inspection by officials from the Ministry of Health’s Food Safety Agency on Monday, six of 84 foreign and domestic fresh and powdered-milk samples tested were found to contain less protein than claimed on the packaging.

The lead content on some samples was also found to be higher than stated but was not above permitted safety levels, said Nguyen Van Nhien, an inspector at the Food Safety Agency.

The samples were taken in Ha Noi, Ha Nam, Thai Nguyen, Son La, Bac Ninh, HCM City, Dong Nai and Binh Duong.

The agency added that it planned to extend the inspection area to other parts of the country. — VNS

Tags: Vietnam Dairy sector