Photo courtesy of Dan Tri
The Finance Ministry will impose wholesale price caps on children's dairy products starting in June.
Following the changes, the price of 25 infant formula brands will not be permitted to rise more than 15 percent beyond the government ceiling.
The price caps will affect brands sold by Abbott, Nestle, FrieslandCampina, Mead Johnson and Vietnam’s largest dairy firm Vinamilk.
The five firms sell milk to 90 percent of the milk consumed by Vietnam's ten million children under six.
Dairy price caps have been discussed at many government meetings and won broad support in late April after it became widely reported that dairy firms had raised their prices this year in spite of huge profits in 2013.
Vinamilk’s formula products will be limited to VND167,000-188,000 (around US$8-9) per 900-gram can, FrieslandCampina’s Frisolac Gold to VND196,000 per 400-gram can and VND406,000 per 900-gram can.
Mead Johnson’s 900-gram Enfamill product will be capped at VND381,000 and 1,8 kilogram Engagrow at VND563,000.
Nestle Vietnam will be held to VND328,000 limit on its 800-gram formula cans.
The ministry said individuals and organizations can use the caps as reference points and report violations to the authorities.
It promised that any complaints will be addressed within five working days.
Retailers and customers have reported that Abbott and Mead Johnson’s plans to circumvent the price caps by reducing the volume of its formula cans without changing their prices.
Meanwhile, Mead Johnson has introduced new brands with the same volume but higher prices.
A Tuoi Tre (Youth) newspaper investigation found that imported infant formulas have been sold at three or four times their import prices since companies began paying doctors and nurses to recommend them to patients and promote them at medical conferences.
High dairy costs have hindered the physical growth of Vietnamese children, with middle-income parents saying formula costs eat up half their salaries.
Last October, the government announced that it would delay a $10-billion program designed to increase the average height of the population by providing free milk at nurseries and primary schools in the country’s 62 poorest districts between 2014 and 2020.
The program was expected to benefit two million kids by offering them a chance to drink milk at school twice a day.
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