VietNamNet Bridge – In Vietnam, Metro Cash & Carry, Adidas registered their business as wholesalers. However, in fact, individual clients still can buy goods directly from the distributors.

The government’s Decree No. 23 on the activities of buying and selling goods clearly stipulates that wholesaling is the activity of selling goods to businessmen and other institutions, which don’t include the sale of goods directly to consumers. Meanwhile, retailing has been defined as the activity of selling goods directly to consumers.

According to the HCM City Department of Planning and Investment, Metro Cash & Carry’s investment registration certificate shows that the distributor’s function is to wholesale goods to the clients who are enterprises and business households to serve the demand for business and consumption.

However, in fact, one still could easily enter any Metro shop without the membership card. A worker at the Metro shop in district 2 in HCM City advised those, who didn’t have membership card, could be “escorted” by the ones who have the cards. This means that one person with the card can bring with himself a lot of other clients.

With the ad pieces “buy one, get one free,” or “buy goods at the wholesale prices” hung over all the stalls, it seems that Metro is aiming the retail sector.

Also according to the HCM City Planning and Investment Department, Adidas Vietnam was licensed as an importer and wholesaler. However, in fact, Adidas has been retailing goods through the mode of making investment in retail establishments.

It has developed over 50 retail points through the mode of the investments in equipments and exclusive product distribution.

According to Le Thi Thu Huong, Deputy Head of the HCM City Taxation Department, there always exist the contracts between Adidas and retailers that Adidas provides shelves, wardrobes, furnishings to retailers, but the retailers must not re-lease or sell to the third parties in any forms.

Meanwhile, the expenses on the furnishings provided to the retailers have been taken into account as the sales expenses.

Besides, Adidas and retailers also sign the contracts under which the retailers act as the sales agents for Adidas, while the sale prices are set up by Adidas. This means that retailers only act as the hired workers for Adidas.

Experts believe that by doing that, Adidas has tried to put its hand into the retail sector in Vietnam.

Dau tu newspaper has many times tried to contact Adidas and Metro to learn more about this, but it was refused.

Nguyen Hiep, a lawyer from the HCM City Bar Association, affirmed on the newspaper that both Metro and Adidas have violated the laws when they carry out the business types which have not been registered to the competent agencies.

Lawyer Nguyen Thanh Tuan from the Dong Nai provincial Bar Association has cited the Decree No. 06 as saying, that if enterprises carry out the unregistered types of business, they would be imposed the fine of VND1-3 million dong. Of course, the fines are not enough to deter the violators, because the sums of money make nothing if compared with the fat money they earn by breaking the laws.

Recently, the foreign big guys have been put at the “aiming points” of Vietnamese competent agencies’ probe.

Dien dan Doanh Nghiep reported that the General Department of Taxation has declared the war with the transfer pricing carried out by many foreign invested enterprises. Especially, it has named the names of many big guys such as Metro Cash & Carry, Adidas, Coca Cola and Pepsi Co Vietnam.

Especially, experts have called on Vietnamese consumers to boycott the products of the enterprises which are believed to evade thousands of billions of dong in tax.

Compiled by C. V