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Retail distribution gets overhaul
The Ministry is collecting opinions on how to improve the system
The Ministry of Industry and Trade has started collecting opinions from other ministries, sectors, cities and provinces to improve domestic retail sales distribution systems.
The project will work to identify solutions to boost development and strengthen State management of distribution systems in retail sales markets both in the present and in the future.
Recently, distribution systems for some necessary items have demonstrated some obvious organisational and management shortcomings, unable to curb fluctuating prices.
Reviewing the domestic market, Hoang Tho Xuan, head of the Department for Domestic Trade Policy, under the Ministry of Industry and Trade, says there are too few enterprises and distribution systems strong enough to cope with market fluctuations, especially in severe circumstances.
Two items accounting for 46 per cent of total public spending – food and foodstuff – are being controlled by organisations and individuals in the private economic sector.
Distribution systems for consumer products are slowly being updated. Most day-to-day items are sold in small retail shops in markets. The country now has more than 8,100 markets, 36 per cent of which are make-shift markets. In rural areas, 78.3 per cent of goods are distributed via markets, while in urban areas markets account for just 21.7 per cent of sales.
Xuan notes that the role of State management in the market is still unreasonable and overlapping. For example, market prices are managed by both the Ministry of Finance and the Ministry of Industry and Trade. Some other ministries also manage commodity-chain associations and enterprises.
Xuan says building, developing and managing distribution systems is necessary to renew and reorganise the domestic market, with a concentration on retail sales markets. He has identified three key areas to be improved.
The first is the necessity to design key retail sale systems, covering important and essential materials and commodities. The next point is to reorganise distribution systems for commodities.
Xuan’s final point is the need to reorganise retail sale systems in localities.
He notes that the main distribution systems should be managed centrally by the Ministry of Industry and Trade, with distribution systems in localities managed by local People’s Committees.
Currently, the Ministry of Agriculture and Rural Development manages food, salt and sugar; the Ministry of Construction manages cement; the Ministry of Health manages pharmaceutical products and the Ministry of Industry and Trade manages steel, petrol, fertiliser and paper.
Xuan suggests that the Ministry of Natural Resources and Environment should issue policies on land, while the Ministry of Finance could develop a fund to stabilise the market and prevent risks.
The plan is expected to design a retail sales system able to cope with fluctuations in the domestic market, and strong enough to compete with foreign enterprises when the country opens the domestic market by 2009.
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