Seafood products meet barriers to supermarket entry

Seafood companies complain that retailers are playing tricks to dislodge their products out of supermarket chains.

The Vietnam Association of Seafood Exporters and Producers (VASEP) has lodged a complaint to ministries, saying that seafood processors meet barriers when trying to distribute products via supermarkets in the year-end sale season.

VASEP’s secretary general Truong Dinh Hoe said Vietnam only sets MRL (maximum residue limit) on limited-use chemicals and antibiotics, while it has not promulgated the regulation on MRPL (minimum required performance limit) on substances prohibited in seafood.

Supermarkets refuse consignments of food which contain prohibited chemicals and antibiotics, though the residue in the products is low and satisfies the EU requirements and will not harm consumers’ health.

Therefore, supermarkets refuse consignments of food which contain prohibited chemicals and antibiotics, though the residue in the products is low and satisfies the EU requirements and will not harm consumers’ health.

Vu Vinh Phu, former deputy director of the Hanoi Trade Department, said more producers want to sell goods via supermarkets and foreign retail chains are creating difficulties for enterprises that want to display their products at supermarkets. 

Big C, for example, after being transferred to the Thai investor, has become inaccessible to many Vietnamese brands as the retailer has required higher discount rates and set severe cooperation conditions.

Dat Viet newspaper cited a report of the General Department of Taxation (GDT) showing that producers have to pay 20 percent in ‘hard discount’ and 12 percent in ‘soft discount’ to bring goods to the supermarket for sale. 

However, attendants at a conference on supply-demand connections held in 2017 heard that producers have to pay 30 percent to enter supermarkets. If this is true, profits left for manufacturers will be modest.

Phu visited a foreign-invested supermarket to discuss cooperation in distributing goods. The officers of the supermarket told him to fly to HCM City to discuss cooperation with the division in charge of collecting goods.

“When inspectors come, they say they are only in charge of selling goods, but inspectors need to work with the head office in HCM City. However, in fact, vegetables and fruits are still regularly brought to the supermarket at 5 am every day,” Phu said.

An economist noted that foreign invested supermarket chains regularly complain they take losses though the supermarkets are always crowded.

“I don’t think with such a high number of buyers, supermarkets still take losses,” he said, adding that it is necessary to investigate if the retailers conduct transfer pricing.

Regarding VASEP’s complaints, he said that retailers’ charge about prohibited substances and consumer protection is unconvincing.