CP Vietnam Corp., one of the two poultry suppliers facing criticism for a recent hike in egg prices, may be fined 10 percent of its revenues if found violating the Competition Law.
Between January 4 and 11, the Thai company hiked egg prices by 37 percent from VND21,500 to VND29,500 (US$1.4) for a carton of 10.
Earlier, between December and January 11, Malaysia’s Emivest had hiked egg prices by 30 percent from VND19,200 to VND25,600 ($1.2).
The price increases were described as unreasonable by Vo Van Quyen, head of the Ministry of Industry and Trade's market division, to VnExpress.
The news website also quoted lawyer Nguyen Van Hau as saying the two companies had "speculated" and could be fined up to VND20 million ($960) under Circular 84.
But CP could be fined 10 percent of its revenues last year if it has a 30 percent market share under Circular 116.
On January 18 CP told the media that it has only a 16 percent market share.
But Dao Thi Huong Lan, director of Ho Chi Minh City's Department of Finance, dismissed this claim, saying the Vietnam Competition Administration is investigating.
Relevant agencies this week would also audit the two companies’ costs and sales during the recent hike in egg prices, she added.
On January 14 CP had told the Ministry of Industry and Trade that the price surge was due to a supply shortage, but the latter rejected the explanation and provided statistics to show supply was normal.
CP then admitted to wrongfully increasing the egg price, and cut it to VND21,000.
But some local supermarkets like Saigon Coop are refusing to buy eggs from the company, saying they will wait until CP makes a commitment not to unreasonably hike prices.
Emivest has lowered its price to VND20,200.
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