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Officials call for milk price shakeup
Rising milk prices have prompted market control officials to call for a shakeup of dairy product pricing and advertising regulations.
“Retail milk prices in Vietnam are indeed high,” Department of Competition Management Deputy Head Dang Hoang Hai told Tuoi Tre at the Milk Prices and Control Measures seminar in Hanoi on July 7.
Milk prices in Vietnam are 60 percent higher than in other Southeast Asian countries, such as Thailand, Malaysia and Indonesia, said Vu Thi Bach Nga, head of the department’s Consumer Protection Division.
Some milk products in Vietnam even retail for double what they are sold for in other countries in the region, a survey found.
The survey, conducted by Vietnamese officials last week, looked at milk prices in 10 countries, including South Korea, the U.S., the Netherlands, Malaysia, Singapore and Indonesia.
Retail milk prices in Vietnam, especially for imported products, have been increasing since 2007 even though the global price of powdered milk has fallen and import duties have remained less than 10 percent, compared to 40 percent in Thailand.
Since 2007, the global price of milk powder has dropped by 60 percent and is now 40 percent below the peak price in 2008.
Vietnam relies on imported milk products because the nation’s 120,000 milk cows, which produce about 250,000 tons of fresh milk a year, can only meet one fifth of domestic demand.
Milk, not traditionally part of the Vietnamese diet, is also heavily advertised on television and marketed though commission-based recommendations.
A Vietnamese household now consumes about 900 grams of milk a month, including fresh milk, condensed milk and powdered milk.
Hai said milk companies paid teachers and doctors to recommend certain milk products to their students and patients, reinforcing the message in milk advertisements that more expensive milk products proved a parent’s love.
Milk companies also claim additives in their products, such as the omega-3 essential fatty acid docosahexaenoic acid, or DHA, can increase a child’s intelligence.
Dung said the government should regulate to ensure milk product advertisements did not make false claims or overstate the nutritional value of their products.
Meanwhile, Hai said milk product advertising should be limited because the ads, played incessantly on television, were misleading consumers.
“Dairy product prices can only be brought under control with the some new concrete regulations to guarantee the transparency of the market,” Dung said. “It will never work out if we just simply ask the companies to decrease product prices.”
“To have reasonable dairy product prices, quality control and health agencies must be transparent in confirming whether the additives in the dairy products are needed,” he said.
The Price Control Department revealed that all the big names in dairy products hiked retail prices last year.
Domestic firm Vinamilk last year increased the price of its 21 dairy products by 10.8 percent. The 3A Pharmaceutical Joint Stock Company, distributor of Abbott milk products, raised prices three times in 2008, between 4 percent and 7.8 percent each time.
Nga said domestic milk distributors and producers could not blame import tariffs for the price hikes because diary products in Thailand, which were subjected to higher import taxes, were still 20 percent to 60 percent cheaper than those in Vietnam.
Vuong Tri Dung, deputy head of the Market Control Department, reported a significant difference between the wholesale price of imported milk products and the price consumers pay.
Each 900-gram can of Enfa Grow A+ milk powder imported by Mead Johnson Vietnam sells for as much as 242 percent more than the cost price, Dung said.
Domestic consumers currently pay an average of $1.40 for a litter of milk while the rate in China is only $1.10 and from $0.50 to $0.90 in America and Europe, Sai Gon Tiep Thi (Sai Gon Marketing) newspaper reported.
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