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Ceiling prices for dairy produce rejected
The plan by the Ministry of Finance’s Tax Policy Department to control dairy prices by imposing a ceiling has failed.
Leaders of the Ministry of Finance (MOF) yesterday declared the suggested plan by the tax policy department unfeasible.
Under current laws, dairy products are not listed in a category of products which need to have ceiling prices.
The failure of the plan was anticipated by analysts, who pointed out that it is impossible to set ceiling prices for nearly one thousand of dairy products now available on the market.
However, following the disapproval by the MOF, no feasible solution to the dairy product problem has been found. Meanwhile, local media continue reporting about the abnormally high sale prices of dairy products and criticising government agencies for the failure to control dairy products’ prices.
Deputy Minister of Finance (MOF) Tran Van Hieu told press after the meeting on October 6 that after discussing measures to control dairy products’ prices government management agencies will seek other reasonable measures to control dairy products’ prices. He added that he hopes MOF can release the decisions on stabilising dairy product prices by the end of this month.
Hieu said that the MOF has assigned the General Taxation Department (GDT) to inspect dairy products’ prices.
However, Hieu said that the most important goal of the price inspection is to find out the unreasonable profit that businesses are making, so as to force enterprises to lower the sale prices of dairy products, and admit the goal has not been obtained.
The Ministry of Industry and Trade (MOIT) recently submitted to the Prime Minister the report on dairy products’ prices in 2008 and the first months of 2009 in Vietnam, pointing out that the dairy products’ prices in Vietnam are overly high.
The ministry said that though the prices of materials used for making dairy products have been decreasing sharply in the world market and the import tariffs have been slashed, the sale prices of many dairy products keep rising.
The ministry, citing the sources from commercial affairs divisions at Vietnamese embassies in foreign countries, concluded that the sale prices of foreign dairy products in Vietnam are higher than the prices of the same products in Malaysia, South Korea, Indonesia and Thailand by 20-60 percent on average. The price gaps sometimes are big at 150-220 percent.
MOF, in its report to the Government, also mention the unreasonably high price of dairy products. According to MOF, in early 2009, the material prices decreased by 13.8-43 percent, the sale prices of dairy products in Vietnam still increased, making the sales prices in Vietnam higher by 60-100 percent than that of other regional countries.
Foreign dairy products now account for 72 percent of the market share in Vietnam.
VietNamNet, TP, VNE
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