The Nutritional Foods Group (NFG), a non-profit, non-governmental representative body of six of the world’s leading multi-national dairy companies operating in Vietnam, said that since the price ceilings were given effect in May 2014, costs have skyrocketed.
This has resulted in catastrophic losses to companies in the segment. The price caps were also the reason that last year leading French based dairy Danone decided to exit the Vietnam market.
The price caps are also contradictory to the government’s policy of opening its markets in line with World Trade Organization commitments and guidelines argued the NFG, stating it would be better to let market forces determine the selling price.
Nguyen Anh Tuan, director of the Ministry of Finance Price Management Department, had late last year told reporters that the price ceilings would remain in effect through the end of 2016 and then the Ministry would be open to lifting them.