VietNamNet Bridge – The Ministry of Health (MOH) plans to curb the immoderate formula price increases by including some kinds of products into the list of products for price control.

New policy hoped to help curb price increases

MOH has consulted with the Ministries of Finance, Industry and Trade and import companies on the drafted legal document which aims to restrain the price control over formula products.

According to Tran Quang Trung, a senior official of MOH, the formula nutritious products for children aged 0-36 months, the milk and milk containing nutritious products with/without supplement micronutrients, made not according with the formula specified in the technical standards, used for the children under six years old, would be put into the list of products for price control.

At the meeting with the representatives from relevant ministries to build up the list of milk-containing nutritious products, the liquid milk products reserved for the children under six years old were also suggested to be put into the list of products for price control.

Also according to Trung, if the MOH’s draft document is approved, from November 20, the above said products’ pricing will be put under the tight control by the state management agencies.

The Ministry of Finance and MOH have vowed to set up the “iron discipline” in the formula milk market after analysts and people complained about the unbearable regular price increases. The ministries have been heavily criticized for the uncontrollable milk price increases. The formula prices in Vietnam are believed to be the highest in the world.

In fact, the ministries several times tried to control the formula prices, but formula manufacturers still could escape the control by dodging the laws.

Milk manufacturers several months ago suddenly changed the names of their milk containing products into “nutritious products” or “supplement food.”

According to the finance ministry, by changing the name, the manufacturers could avoid the price control, which, under the current laws, is not applied to nutritious products.

Experts have applauded the decision by MOH to put the “nutritious products” under the control as well. In fact, the products have the same nutrition contents, the same nature and quality as milk products. Therefore, they must be put under the price control as stipulated by the Price Law.

Will it help?

Vu Vinh Phu, Chair of the Hanoi Supermarket Association, thinks that the new policy on putting nutritious and supplement food into the list of products for price control is not likely to help force the prices down.

Phu said despite the criticism and the strict regulations set up by the state management agencies, the formula prices still have increased by 30 times just over the last six years with the 3-20 percent increase each time.

Some foreign formula brands have seen the price increasing five times so far this year.

“The changing of the name of formula products is just a trick made by formula suppliers to raise the selling price, while it is not the main reason behind the price increase,” Phu said.

The retailer has attributed the unreasonably high prices of formula products to the mismanagement. The formula retail prices would be considered “reasonable,” if they are some 30 percent higher than the original prices. Meanwhile, in Vietnam, the prices are equal to 400-500 percent of the original prices. However, no agency has claimed responsibility for this.

Thanh Mai