Ministry Sets Restrictions On Retailers Business

VietNamNet Bridge - The Ministry of Industry and Trade (MOIT) is drafting a government decree on the development and management of the distribution sector.

Supermarkets must not run sale promotion programs more than 3 times each year

Retail establishments have to satisfy standards to be called ‘supermarkets’ or ‘shopping malls’. They cannot use the words ‘supermarket’, ‘hypermarket’, ‘Big Mart’, ‘Big Store’, ‘Shopping Center’, ‘Trade Center’ and ‘Plaza’ on their signboards without justification. 

Supermarkets must not run more than three sale promotion programs each year, while each program must last at least 30 days. The next sale promotion program can only be organized at least 30 days after the previous one. 

During the time the program runs, at least 70 percent of goods available at supermarkets and shopping centers must be covered by the programs. 

Supermarkets must have a business area of between 250 and less than 10,000 square meters. They also must satisfy requirements on construction, sale equipment, storage conditions and services for disabled and children.

Meanwhile, trade centers must have a at least a business area of 10,000 square meters  and satisfy other requirements.

MOIT wants to strictly prohibit retail establishments from calling themselves ‘sieu thi’ (supermarket) or ‘trung tam thuong mai’ (shopping mall) if they cannot meet the standards stipulated by the decree, and prohibit them from using foreign words.

Businessmen who run supermarkets or shopping centers classify their retail establishments in accordance with guidance and examination by the industry and trade department.

Supermarkets and shopping centers have to be open all days of week, including holidays, at least from 10 am to 10 pm.

An analyst noted that he can find in the draft some provisions which ‘inherit’ a legal document issued 15 years ago – Decision 1371 released by the then Minister of Trade in 2004.

The restrictions shown in the draft decree have been facing criticism. The Vietnam Chamber of Commerce and Industry (VCCI) commented that the tentative regulations on sale promotion programs demonstrate deep intervention by MOIT in retailers’ businesses.

“If MOIT fears sale promotion programs affect the competitive market, it needs to control the activities in accordance with competition laws,” VCCI said. 

VCCI, which represents businesses, said the government and MOIT are making every effort to cut business conditions to facilitate enterprises’ operation. 

However, the regulations set in the draft decree try to set up new business conditions, which is contrary to the process of simplifying administration procedures.

An analyst said he cannot understand why MOIT needs to set up standards for retail facilities to be called ‘supermarkets’. 

“How will the public interests be affected if retail establishments proclaim themselves ‘supermarkets’ even though they cannot meet standards?” he said.

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