Vietnam milk prices excessively high

Vietnamese milk products are unreasonably expensive, experts say, adding that local consumers may be paying the price for their own ''expensive is good'' mindset.

 

Vietnam Standard and Consumer Association (Vinastas) vice chairman Ho Tat Thang said that although global dairy prices and import tariffs fell last year, the prices of milk products have continued to rise in the domestic market.

 

Thang said several imported milk products are being sold at the highest prices in Vietnam, pointing out that fresh milk retails at US$1.40 a litre in Vietnam, compared to US$1.10 in China, US$0.50 in India and US$0.50 to US$0.90 in the US and Europe.

 

Milk prices on the global market have dropped more than 40 percent since they peaked in the third quarter last year.

 

Powdered milk is imported to Vietnam at around VND60,000 a kilogramme, after tariffs.

 

Experts said after vitamins and other ingredients are added and all overheads included, the reasonable price of formula milk should be around VND100,000 per kilogramme.

 

However, locally branded formula milk now retails at VND143,000-VND165,000 per kilogramme while products of foreign brands cost VND305,000-VND425,000 per kilogramme.

 

Statistics from Vinamilk show that the domestic dairy market was worth VND8 trillion last year, with foreign producers holding an 80 percent market share.

 

According to an expert at market research firm FTA, although the imported materials used in formula milk products of different brands are almost the same, prices of the so-called high-end products are proportionally much higher.

 

FTA said consumers judge the quality of milk products based on their packaging, brand names and how expensive they are, and this mindset has widened the price gap among milk products.

 

US$1 = VND17,783 (May 28)