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Fresh milk tax rises, but milk powder prices increase
The milk powder prices have been increasing significantly in the last two days. It is quite strange that while the Ministry of Finance decided to raise the import tax on fresh milk, the product that has seen price increases is milk powder.
When the Ministry of Agriculture and Rural Development (MARD) asked to raise the milk import tax, analysts warned that the tax increase will lead to the price increase of import dairy products. The Ministry of Finance, fearing the price increase, decided to maintain the low tax rates for milk powder in order to prevent the sale prices from increasing.
Imports prices escalating
Linh Mai in Cau Giay District, Hanoi, yesterday went to the Thanh Cong Market to buy XO milk No. 4 for her 2-year-old son. She was so surprised when the milk shop owner said that the milk price has increased by VND 28,000/900g carton, from VND 302,000 to VND 330,000.
Mail was told that the prices of other brand name products, including Abbott and Nestle, have also increased by 5%. Mai heard about the tax increase decision several days ago, but she thought that the tax hike would not affect the milk powder price. Therefore, she did not purchase milk products to hoard up, and she now regrets this.
A quick survey conducted by VietNamNet reporters in Hanoi showed that milk sale agents all have announced new prices for products with the brand names of Abbott, XO, and Friso. In general, the milk powder prices have increased by 4-5%.
Enfagrow trademark milk for year-old children has surged from VND 290,000 to VND 304,000/900g carton, Nan trademark of Nestle from VND 320,000 to VND 336,000, Gain Plus Advance IQ3 from VND 295,000 to VND 307,000, and Pedia Sure from VND 357,000/900g carton to VND 366,000.
Experts said that import products all have increased in price because Vietnamese consumers always prefer foreign made products. Meanwhile, there is no reason for distributors to raise the sale prices, especially when the world’s material prices have been on the decrease. The decision by the Ministry of Finance to raise the fresh milk import tax is just an excuse for distributors to raise the sale prices.
Wrong prescription?
Nguyen Tuan Khai, Director of the International Milk Joint Stock Company, said that importing milk powder for domestic processing proves to be the optimum solution now for domestic dairy producers.
The director of a dairy company in the north said that the higher taxation on fresh milk could be described as the wrong remedy for the current problems. No producer would be foolish enough to import fresh milk, especially when the tax has increased by 20%. The low tax rates of between 3-7% for milk powder will prompt local producers to push up the imports of milk powder for domestic processing.
Domestic fresh milk products’ prices stay the same
The owners of the milk shops at No. 190, 192 and 216 Tay Son Street and No. 40 Vu Trong Phung on March 10, affirmed that there has been no information about the price increase of domestic products.
Men from the shop at No. 216 Tay Son Street said that she has just received products from Vinamilk and Dutch Lady at the same prices. Therefore, the sale prices will stay the same: Vinamilk’s 100ml fresh milk carton is still selling at VND 4,500, while Dutch Lady 180 ml fresh milk is also selling at VND 4,500.
Ha Yen
vietnamnet
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