Danone exiting Vietnam due to dismal Dumex sales

September 05, 2016 | 11:45

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Danone Vietnam, a subsidiary of French multinational food company Danone SA, announced stopping its operations on August 30.

As reported by newspaper Thoi Bao Kinh Te Sai Gon, a company representative attributed the decision to the low sales of children formula Dumex. “The market share of Dumex in Vietnam is not enough for the company to continue making investments here,” the representative said, adding that the company will not withdraw from its other Southeast Asian markets.

Earlier, Danone disposed Dumex China due to a significant decrease in market share following a food safety scare that later proved to be a false alarm. The sale of Dumex China to Yashili International Group Ltd. was finalised on May 31, 2016, for €150 million ($159 million).

Besides Dumex, popular brands of formula for children under six in Vietnam include Pediasure and Similac by US company Abbott, Enfagrow by US company Mead Johnson Nutrition, Friso by Friesland Campina from the Netherlands, Aptamil also by Danone, and Meiji by Japanese company Meiji.

The Vietnamese government frequently campaigns to encourage mothers to breastfeed. The government also forbids advertising for children under two years of age, starting at the beginning of last year.

Moreover, starting on June 1, 2014, there has been a price ceiling issued on formula for children under six. A Nielsen survey carried out in Ho Chi Minh City and Hanoi revealed that sales decreased by 10 per cent in volume and 9 per cent in value by February 2015, compared to the same period in previous years.

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