30% Of Goods At Supermarkets Must Be Vietnam-made: Ministry

30 percent of goods at supermarkets must be Vietnam made

Vu Vinh Phu, a retail expert, and former deputy director of the Hanoi Trade Department, believes this is a reasonable and necessary requirement. 

Phu said under Vietnam’s WTO (the World Trade Organization) and other FTA (free trade agreement) commitments, there is no provision about how much space supermarkets or shopping malls in Vietnam have to reserve for Vietnamese or foreign goods. So it would be better if Vietnam takes the initiative in setting such a regulation to protect Vietnamese products that are still weak in competitiveness.

Many other countries also have regulations forcing retailers to give room to products made by the host countries. When acquiring Metro Cash & Carry, BJC Group announced that it would sell 60 percent of Thai goods at 19 Metro supermarkets.

“Why doesn’t Vietnam set up similar regulations to protect Vietnamese goods?” Phu said.

Phu said that it is necessary to classify supermarkets and point out which kind of supermarkets have to apply the regulation.

The supermarkets which had land and capital allocated are obliged to follow the regulation on the proportion of Vietnam’s goods. 

There are two groups of this kind, the 100 percent Vietnamese owned retailers, and the supermarkets whose 30-65 percent of shares have been sold to foreigners.

“There were supermarkets which received strong support from the state but they were sold to foreigners, such as Phu Thai, Fivimart, Citimart and Nguyen Kim. In these cases, we indirectly supported foreign businesses, as commented by Deputy Minister of Industry and Trade Do Thang Hai,” Phu said. 

The supermarkets should also be required to observe the regulation on the minimum percentage of Vietnam-made products.

As for 100 percent foreign owned supermarkets, or those which have been fully taken over by foreigners, according to Phu, Vietnam needs to negotiate with them about the minimum. 

In the long term, in order to cement their positions at supermarkets, Vietnam-made products need to be stronger and more competitive.

Meanwhile, the Vietnam Retailers’ Association (VRA) said the tentative regulation drafted by MOIT needs reconsideration based on conformity with international commitments. It is also necessary to set a suitable required proportion of Vietnam-made goods.

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