Complaints by Ho Chi Minh City businesses about foreign retailers in Vietnam have sparked the prime minister to order an investigation.
Members of the Ho Chi Minh City Union of Business Associations (HUBA) say the growing number of foreign retailers in Vietnam have a loose rein to expand at a pace that will eventually hurt local companies.
HUBA has sent at least two letters to the government raising questions about the legality of some business activities by foreign retailers, reports Thanh Nien News.
Vietnam laws forbid foreign businesses to distribute products such as rice, cane sugar and cigarettes, but these items are still available at the supermarkets and convenience stores of most foreign retailers, including South Korea’s Lotte and Big C, Tuoi Tre reports.
Following the complaints, Prime Minister Nguyen Xuan Phuc has ordered relevant agencies to check into foreign retailers, including mergers and acquisitions.
Media reports say Mega Market Vietnam, which owns Metro wholesale stores, is expected to be first to face the scrutiny. The stores were originally run by Germany’s Metro before being acquired by Thailand consumer group TCC this year.
Statistics show that Vietnam is home to more than 700 supermarkets and 132 shopping malls, mostly in the main centres of Hanoi and Ho Chi Minh City.
Meanwhile, Hanoi Association of Supermarkets chairman Vu Vinh Phu says a supermarket in the northern city of Hai Phong had its revenue fall 30 per cent six months after a foreign superstore opened.
Foreign companies now control more than half of Vietnam’s retail market, says the association, and many producers complain they are struggling to have their products in foreign supermarkets mainly because the retailers ask for high discounts, says HUBA vice-chairman Pham Ngoc Hung.
Meanwhile, products from countries such as Japan, Malaysia, South Korea and Thailand are becoming more and more popular.
Vietnam’s retail sales rose 10.6 per cent from 2014 to VND2469 trillion (US$109.4 billion) last year, official figures show.
