Government unwilling to intervene in retailers activities

OTHER | Wed, May 11, 2016 02:49:38 PM Share this on

The government management agency will not "intervene" in the purchasing activities of retailers until suppliers can prove that supermarket chains were discriminating against their products, the governments e-portal reported.

This clarification was issued by a representative of the Ministry of Industry and Trade following a claim by the Viet Nam Association of Seafood Exporters and Producers (VASEP) that several giant supermarkets asked for unreasonably high discounts to place on their shelves products provided by seafood suppliers.

Vo Van Quyen, director of the Ministry of Industry and Trades Domestic Market Department, said that the purchasing of retailers was market-based and the government did not intervene, unless there was evidence to prove discrimination in the purchase.

VASEP said that BigC, which was recently reported to be acquired by Thailands Centre Group in a deal worth US$1.05 billion, asked for the highest rises in discount rates of between 4.2 per cent and 5.5 per cent, pushing the discount rates provided to the giant supermarket chain up from 17 per cent to 25 per cent.

"The rates are too high and seafood suppliers will certainly suffer losses," VASEP said in its document sent to BigC.

VASEP proposed in the document to BigC that it not increase discount rates for new supply contracts this year while cutting the average discount rate to below 15 per cent – a rate that could ensure the reinvestment ability of seafood companies.

In response, Ho Quoc Nguyen, communication manager of BigC was quoted by the governments e-portal as saying that the supermarket did not create pressure on any supplier with the purchases based on agreements between the two sides.

Currently, more than 90 per cent of products of shelves of BigC were Vietnamese products, Nguyen said, denying the accusation that the supermarket intended to replace Vietnamese products on the shelves with Thai products.

BigC also said that it had not received VASEPs document.

BigC has been in Viet Nam for more than 18 years and developed into a chain of 32 supermarkets throughout the country.

The supermarket was under scrutiny by the tax watchdog with regard to its compliance with the inspection expected to finish this month. 

Source: OTHER