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Retailers fret about foreign stores
Domestic retailers will face tough times now that provinces and major cities are authorised to grant licences to foreign firms to open supermarkets, predicts Viet Nam Retailers Association general secretary Dinh Thi My Loan.
At a meeting this week between association members and the Ministry of Industry and Trade, Loan urged the application of the WTO’s economic need test (ENT) to allow Viet Nam to assist domestic enterprises in competing with incoming foreign competition.
She also called on the ministry to supervise the granting of licences to foreign retailers.
Ha Noi Trade Corporation (Hapro) general director Vu Thanh Son agreed that domestic companies were at a disadvantage against foreign rivals. Foreign companies entering the Viet Nam market were willing to suffer losses for a long period while establishing a foothold in the domestic market, he said.
If local authorities were allowed to grant licences to foreign retailers for second or third retail outlets, it could lead to a rampant issuance of licences, Son worried.
A representative of Phu Thai group said that he had conducted a survey of locations in which to open a new supermarket. Local authorities told him they would give priority to foreign companies in case of rival applications to open a supermarket.
To avoid a situation in which localities begin to casually apply the needs test, the ministry said it would need to come to a consensus on criteria for granting licences for foreign companies to open second or third retail outlets in a particular province or city.
Criteria needed to be clear to allow both domestic and foreign companies to monitor what their rivals are doing, but developing a standard would not be easy, as cities and provinces have different social and economic characteristics.
The ministry refused to oversee the approval of licence applications by local governments.
But, ministry official Hoang Tho Xuan said the minisry would work with major cities to prepare a detailed plan of where to zone for and approve major retail establishments.
Xuan said zoning could be used in cities and provinces as a basis for local authorities to grant or deny licences to investors.
Supermarkets Association chairman Vu Vinh Phu said such an approach would help businesses feel more secure as they implement their business strategies.
Ministry leaders vowed to continue gathering public opinion as well as to study the application of ENT consistent with the nation’s WTO commitments. The ministry would strive to create a transparent business environment for both domestic and foreign businesses, they said.
vietnamnews
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