Retail imported milk prices are nearly doubled once they hit the market due to over-expenditure on wage, management and marketing.

After taking a closer look at companies such as Nestlé Vietnam, Mead Johnson Nutrition Vietnam and Tien Tien Distributor, Inspectors of the Ministry of Finance inquired, “If marketing and advertising expenses are reduced in coordination with distributors to manage retail milk prices, can milk importers decrease the prices?”

Consumers bear too much selling charges (Photo by Le Phuong)

The result of inspection of Nestlé Vietnam Ltd. revealed that importing tariff accounts for 1-4 percent of retail price. This means consumers often have to pay an average amount of VND400-1,500 ($0.02-0.08) per 100 grams of imported milk. The imported prices were headed down in the early six months of 2009 but retail prices were not reduced, instead remaining at the 2008 price levels.

Distributors to Mead Johnson Nutrition Vietnam Ltd. Company have full rights to decide retail prices of the company’s products in the market, whereas the importer never publicises the selling prices applied to their dealer in the market.

Mead Johnson Nutrition Vietnam amended prices twice since July but until date, the retail prices have not yet decreased. The balance between selling and C&F prices is around 101-211 percent, the balance between selling and factory prices is around 96-197 percent.

Tan Tien Company, the exclusive distributor of Mead Johnson Nutrition Vietnam, benefited from a 25 percent reduction of buying prices in some periods but the company did not reduce the retail price.

The results also showed that Vietnamese consumers now have to bear the burden of other charges such as wages, management, advertising, marketing, and commissions…for each milk box.

Importing prices and tariffs as well as value-added taxes on milk products have remained stable yet, retail prices are always high because of operation and marketing expenditure.