A dairy store in Hanoi. Photo: Ngoc Thang
The Vietnamese government will continue to apply price ceilings on formula for babies under 6 years old until December 31 next year, as local prices remain higher than those of many countries in Southeast Asia.
The limits will be unchanged from those imposed on June 1, the Department of Price Management under the finance ministry announced at a press conference on Thursday.
Last year the ministry introduced ceilings on 25 brands of Abbott, FrieslandCampina, Mead Johnson, Nestle, and Vietnam's largest dairy firm Vinamilk.
The ceilings are set between VND167,000 and VND610,000 (US$7.6-28) per can, depending on the weight.
Retail prices are not allowed to be more than 15 percent higher.
Thanks to the "stabilization initiative," prices of 708 formula brands have been reduced by 0.1-34 percent over the past year, according to the department.
A government decree issued in March banned advertisements on foods and dairy products for babies under 2 years old. The department said this policy also brought prices down, by between 1 and 5.5 percent.
Regardless of the government's efforts to rein in local formula prices in recent years, they are still higher than similar products in most of Southeast Asia.
A survey by the economic department under the foreign ministry showed that in Vietnam each kilogram of formula powder costs US$16, compared to $14 in Thailand, $12.9 in the Philippines, $10.9 in Malaysia, and $9.5 in Indonesia.
Nguyen Anh Tuan, director of the price management department, said Vietnam's fickle dairy market is subject to "unusual" fluctuations.
He said local businesses are "easily manipulated" by their foreign partners who control supplies of both materials and finished products.