Seeking ways for effective milk price control

>> Vietnam set to probe milkprice manipulation

>> Dairy firms deny allegedmilk price manipulation

>> Milk prices continue to rise

A representative from a local milk business said input materials on the world market skyrocketed late last year.

Even powdered milk and butter prices soared by nearly 40 per cent.

“Firms usually have long-term stocks ready for production but are quick to raise their prices commensurate with the world market to reap high profits,” said the representative.

According to the source, “it may take several months for higher input costs to actually effect production cost”.

Former deputy head of the Hanoi Department of Trade Vu Vinh Phu accepted regular milk price hikes as commonplace, as they have been rising for several years now but noted the assessment of the true product price was weak.

“This makes it a challenge to manage the price of milk products,” he said.

In fact, customs cares only about the accuracy of import procedures as overseeing imported milk products after the import phase completely falls on market management units, and they have done little to manage the industry.

Another factor is the assessment of marketing and distribution expenses once imported milk makes it into the country.

As a result, inspection groups to check milk businesses’ operations was viewed positively by the public, who want to know whether firms are reflecting real costs, or just raising prices to expand their profit margins.

However, the public is not so confident that authorities will make gains in managing the price of milk.

“Checking the price hikes of milk products occurs every year, but the price has continued to rise. No business has yet been penalised for price hikes,” said Trinh Thi Ha, a Hanoi consumer.

This year the milk price has gone up between 5 and 12 per cent against the end of 2013.

In this context the head of the Ministry of Finance’s Price Management Department Nguyen Anh Tuan said it was not as simple as imposing a price cap on milk products, because each brand has its own production method and each business has a different operating methodology.

“It is not as simple as imposing a petroleum price cap,” he asserted.