Milk price stable, but still high

Milk products being showcased at Big C Supermarket in Ha Noi. Various distribution channels and pricing policies have challenged the Finance Ministry to control milk prices. File Photo

Nguyen Anh Tuan, head of the ministry's Price Management Department, told a Tuesday meeting on the issue that the prices of milk for children under six have been kept stable for a year, even reducing by between 0.1 per cent and 34 per cent over the period prior to stabilisation efforts.

Online newspaper Hai Quan, which organised the meeting, reported that serious implementation of measures by State management agencies as well as businesses made the stabilisation possible.

The stabilisation of milk prices in the domestic market was a timely policy introduced by the Government, Tuan said.

Since April 20, the market has seen price reductions in 50 kinds of milk products for children under two because of a requirement to remove advertising costs from the selling price.

However, Tuan conceded that prices of milk products for children under six still had the potential to fluctuate. He noted that while the price of milk materials had reduced on the world market, the prices of finished products had remained mostly unchanged. The average selling price per kilogramme of formula milk products for children under six in Viet Nam is higher than in several other ASEAN countries.

There are differences in selling prices because milk producers have different distribution systems and pricing policies for different countries based on the business environment, incentives, competition and market segments, Tuan said.

Additionally, the raw material or finished milk products are imported under direct agreements with foreign partners, so State agencies found it difficult to control and determine input factors and their prices for production and distribution of milk products, he added.

In this situation, the State encourages milk producers and traders to maintain stability in selling prices in the domestic market, while relevant agencies persist with current measures to keep prices stable until the end of 2016, Tuan said. He said the measures are implemented to ensure the interests of both businesses and consumers.