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Ministry acts to curb milk prices
Wholesalers and retailers of imported powdered milk for children under six will have to explain their prices to the Price Administration Department from Friday, October 1.
* Ministry acts to curb powdered milk prices
The requirement, contained in Finance Ministry Circular 112/2010/TT-BTC issued late last week, is intended to halt the volatility of the product's constantly rising price.
Price Administration Department Deputy director Nguyen Anh Tuan explained the action was necessary because of the remarkable change in the price of powdered-milk.
The department would work with all powdered-milk companies to set a common price for each product, he said.
Penalties
Prices outside those set would be suspended and vendors who broke the rules would either have to pay the difference between the two prices or have their business licences revoked.
The department planned to have wholesalers and retailers register their prices with local authorities to deal with the heavy work load.
The price for imported powdered milk has long bewildered both price administrators and consumers.
Several dairy firms raised their prices by up to 10 per cent earlier this month supposedly to offset higher input costs but many suspect it was done to increase profits.
"The latest reports and statistics show a number of shortcomings in price administration," said the Finance Ministry's Price Administration Department director Nguyen Tien Thoa.
‘The current regulation requires that only companies in which the State holds at least a 50 per cent-stake must explain their prices. But most powdered-milk vendors in Viet Nam do not have such a high rate of State-ownership."
Further, the prevailing law allows intervention only if the retail price rises 20 per cent over the course of 15 days and retailers confine themselves to incremental rises of 5-7 per cent.
The Finance Ministry's Tax Policy Department had proposed ceiling prices for milk products to stop price manipulation but this proved impractical.
Official statistics show that Viet Nam had imported US$394 million worth of milk and other dairy produce as of mid July compared with about $269.45 million for the same seven months of last year.
Viet Nam Customs reports that the international price for powdered milk has fallen since its peak in May.
The price of full cream powdered milk from such major suppliers as Europe, Australia and New Zealand now stands at $3,200 per tonne, compared with $4,000 per tonne in May.
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