Remove price ceiling, only monitor retail prices of milk?

The MOIT will manage milk price under the controlling the final prices. Picture: Phan Thu.

Make price declaration.

Although the imposing of the price ceiling on milk over times has brought some positive effects in stabilizing prices, supporting some subjects using milk and milk products, experts and enterprises still think that this measure is not the best measure, just a non-market measure, restricts competition.

At the conference to collect comments on the draft circular on managing the milk price and functional foods for children under 6, held on April 14, 2017 by the Ministry of Industry and Trade (MOIT), Mr. Vo Van Quyen, Head of the MOIT’s Domestic Market Department has recognized that stabilizing the milk market by imposing a price ceiling on milk has been showing inadequacies.

As his view, the policy of stabilizing milk prices has had some negative impacts on the distribution network as well as the nutritional properties of milk due to limited regulations.

Therefore, the MOIT has drafted a Circular on milk prices with the expectation of creating a consent and harmony of 3 benefits, in which the State creates policies, benefits for enterprises and protect the rights of the consumers.

Accordingly, the MOIT will request the manufacturing enterprises to manage their distribution systems and control prices in the network, and the State will inspect the implementation of these enterprises to ensure a fair competition.

Added information, Mr. Nguyen Loc An, Deputy Director of the MOIT’s Domestic Market Department said, after finishing the imposing of stabilizing price measure, the milk prices for children under 6 would be managed under the direction the regulations on price declaration of enterprises.

After the head enterprises make their price declaration on milk at the state competent authorities, the MOIT will collaborate with Departments of Industry and Trade to publicize the retail prices in the whole country (via the website of the Ministry, Departments, and enterprises…).

“By this measure, we can trace the origin of goods, control quality and prices…, determine the responsibility of traders violating or recall products in the case of having quality problems.

Control final prices?

Despite accessing to draft circulars as well as listening comments from drafting agencies, many people still expressed concern that milk prices will "dance" as the system distributes.

Mr. Nguyen Manh Hung, Vice President and General Secretary of Vietnam Standard and Consumer Association (VINATAS) said: “What I fear most is the milk prices will not be well controlled at stores far from the center because the retail network is too small and fragmented.”

Agreed with this view, Mr. Vu Ngọc Quynh, General Secretary of the Vietnam Dairy Association said, when decentralizing management of milk prices to localities, if not well managed, it is hard to stabilize prices, notably in the popular segments.

In addition to large supermarkets, there are many household businesses in the localities, eventually sailing at sidewalks, thus, it is hard to control prices of these points of sale.

In this regard, Mr. Quyen affirmed, the remove of price ceiling doesn’t mean the State “give up” the management of milk prices. The intermediary price Intermediary price is not a matter of concern, the organization at the stage of distribution is the right of enterprises, but the concern is the final price to consumers.

Accordingly, the State will not make too much effort on controlling the intermediate price, the main measure is to control the final prices, considering the retail prices to consumer reasonable or not.

Besides, authorities and market-managing forces will strengthen measures to control registration and price listing, as well as ensure stringent controls to prevent milk prices climbing unreasonably.