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Could a milk shake-up be mission impossible?   2009-09-22 - Viet Nam Net

With the Ministry of Finance (MOF) attempting to set a ceiling price for powdered dairy products, experts warn it could be impossible.


The move comes as the Tax Policy Department under the MOF consults with relevant ministries on measures to control dairy product prices.


It follows widespread media reports of abnormally high prices and criticism that government agencies had failed to control prices.


MOF has suggested setting a ceiling price and, if dairy producers and suppliers sell their products at a higher price, they will be fined. The fine will be between 10 and 20 million Dong plus all the profits gained from over charging.


MOF has suggested that the Price Control Agency under the ministry will analyse local retail prices and work with customs and taxation agencies to define reasonable expenses and profits for business. This information will serve as the reference for MOF to set up a ceiling price level.


However, the MOF’s suggestion has already met opposition.


One expert source commented: “There are hundreds of dairy producers who are making thousands of dairy products which have different production costs and different brand name values. How can the MOF set up a single ceiling price for all of them?”


As an example, he stated that the MOF and the Ministry of Construction are still updating construction material prices in order to set up framework prices for construction works funded by the State. However, businesses have complained that ministries have been slow in updating information meaning big difficulties for contractors.


A similar situation is now occurring with petroleum prices. While the world’s oil price has been fluctuating heavily, agencies have been slow in updating information and adjusting the domestic petrol prices accordingly and consumers have suffered.


Now analysts are concerned that the same problem could be seen in the dairy industry where there are thousands of products and hundreds of brand names.

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