Masan bids adieu to $217.39 million capitalisation

Are consumers boycotting Masan products for traditional fish sauce?

Masan Group (HSX: MSN) in the group VN30 (the group of 30 largest-cap stocks traded on HSX) recorded a decrease on March 18, along with Phu Nhuan Jewelry JSC (PNJ), Saigon Beer-Alcohol-Beverage Corporation (Sabeco – SAB), and SSI Securities Incorporation (SSI).

In particular, this was the sixth consecutive decline for MSN, perhaps partially due to the company's involvement in crafting new draft standards for traditional fish sauce producers.

Before March, MSN produced impressive growth, increasing from VND77,000 ($3.35) to nearly VND90,000 ($3.91) only in February, a rise of 17 per cent.

At the beginning of March, many enterprises in traditional fish sauce production raised their voice against the draft national technical standards for fish sauce (TCNV 12607:2019) proposed and put out for consultation by the Ministry of Agriculture and Rural Development (MARD).

The reason is that most standards set by the draft will cause difficulties for traditional fish sauce producers.

Le Tran Phu Duc, chairman cum general director of Phan Thiet Fish Sauce JSC (PT FICASO) stated on baobinhthuan.com.vn that he was one of 12 members chosen by the MARD on behalf of the Phan Thiet Fish Sauce Association to build the draft.

“The first meeting I attended was open and had good and transparent ideas for both traditional and industrial fish sauce,” Duc said. “However, by February 2018, the contents of the first meeting were deleted and another meeting was held with the participation of Masan Group.”

According to Phu Duc, the second meeting’s content wholly disregarded the first one.

As the fish sauce market was thrown in distress, MSN stocks began losing their value. ON March 22 the stock stood at VND84,500 ($3.67), down 2.2 per cent compared to a week before.

Since the draft was put to consultation, MSN stocks lost about VND5,300 ($0.23) in value, equivalent to 5 per cent of their market price. This means more than VND5 trillion ($217.39 million) of the company's capitalisation “disappeared.”

Many organisations representing the traditional fish sauce industry strongly oppose the standards set out in the draft, claiming them to be unreasonable, difficult, even going so far as to say it will destroy traditional fish sauce.

Standing fast against the public backlash, Masan's representative said that he has carefully studied the draft standards and found it compliant with international standards and thinks it is feasible for implementation, according to news.zing.vn.

In 2018, Masan Consumer Corp. was the leading player in sauces, dressings, and condiments thanks to its dominance in fish sauce and soy sauce and strength in chilli sauces. Masan offers a wide range of products in both the premium and mass segments.

According to Euromonitor, the global fish sauce market value is estimated at $4.5 billion with an annual growth of about 4.7 per cent from 2016 to 2021. Of this, the Vietnamese fish sauce market is estimated at about $501 million, with more than 70,000 tonnes of fish sauce produced in 2015. Over 300 million litres of fish sauce are consumed annually and a Vietnamese person consumes an average of four litres of fish sauce each year.