CUTS Centre for Competition, Investment &
Economic Regulation (C-CIER)
Advocacy and Capacity Building on Competition Policy and Law in Asia
CUTS Centre for Competition, Investment & Economic Regulation (C-CIER) is implementing a two-year project entitled ‘Advocacy and Capacity Building on Competition Policy and Law in Asia’ (7Up2), supported by the State Secretariat for Economic Affairs, Switzerland (SECO), the Swiss Competition Commission (COMCO) and the Department for International Development (DFID), UK. The project endeavours to accelerate the process towards a functional competition policy and law for selected countries (Cambodia, Lao PDR, and Vietnam in Southeast Asia, and Bangladesh, Nepal and India in South Asia), and advance an enabling environment for the law and policy to be better enforced.
The project is undertaken in partnership with renowned institutions in each of the project countries. Details of the project are available at http://www.cuts-international.org/7up2.htm
Project News
Project Mid-term Review Meeting
Hanoi, Vietnam, August 17-18, 2005
The Mid-term Review meeting was organised on August 16-17, 2005 in Hanoi, Vietnam, providing an opportunity of the Project to take stock of progress to date and review the research findings of the Phase I. It was principally a forum for the Project team, the country partners, the donors and other national and international stakeholders to sit down together and assess the extent to which the Project was able to achieve the goals it had set out to accomplish, to identify bottlenecks, and chalk out a future plan of action for the Phase II.
The meeting was inaugurated by the Vice Minister of Trade of Vietnam, Dr Le Danh Vinh, who highlighted the role of ‘a fair, equal and non-discriminatory competition environment to support and promote enterprises doing business and to attract more foreign investors to Vietnam.’ Representatives of the Project donors, leading civil society organisations (CSOs), research institutions and consumer associations from the six Project countries, as well as renowned experts on competition, representatives of inter-governmental organisations, and representatives of competition authorities, participated in and contributed substantially to the discourse triggered thereinafter.
Competition issues in several sectors, such as telecommunications, electricity, pharmaceuticals, and agriculture, as well as the issues related to the application of competition principles in the overall economic policy-making process also featured among the topics for deliberations.
Further details of the meeting, along with the presentations, can be retrieved from the Project web page at http://www.cuts-international.org/7up2/FinalAgenda.htm.
M&As Investigative Skills Training
Catba, Vietnam, August 13-14, 2005
A training workshop on merger and acquisition (M&As) investigative skills was organised during August 13-14, 2005 in Catba, Vietnam, within the framework of the project, drawing the participation of more than 30 Vietnamese Government officials, including those from the Competition Administration Department of Vietnam (VCAD). Several renowned international experts were invited as resource persons for the training.
As gathered from the feedback of the participants, the workshop was very useful in accentuating the need for enforcement of the newly enacted Competition Law 2004 of Vietnam. The training sessions, designed as a blend of theoretical analyses and hypothetical case studies, drawing upon the varied experiences of experts, were said to have successfully helping to equip the VCAD staff with the necessary know-how to deal with future M&As review and investigation.
Further details of the workshop, along with the presentations, can be retrieved from the Project web page at http://www.cuts-international.org/7up2/Finalagenda-MAs.htm.
Consumer Representatives Training: Competition and Consumer Protection
Thanh Hoa, Vietnam, August 22-23, 2005
CUTS, in collaboration with the Vietnam Standards and Consumer Association (VINASTAS), organised a training workshop for Vietnamese consumer representatives on issues related to competition and consumer protection in the country on August 22-23, 2005.
The workshop aimed at sensitising representatives from consumer groups non-governmental organisations (NGOs)/activists on competition and consumer protection issues, so that they could identify various unfair and anticompetitive practices prevailing in the market, and seek redressal. It was also to help to foster public acceptance and support to aid the effective implementation of the Competition Law 2004 of Vietnam by inculcating the spirits and content of the Law among widespread consumers.
About 30 participants, including officials from the Competition Administration Department, Ministry of Trade, Vietnam, attended the workshop.
News Briefs from Project Countries
Bangladesh
Monopoly Removed: Bangladesh Expects Boom in PSTN
Bangladesh, which witnessed a surge in its mobile sector recently, was expecting a boom in fixed-line telephone after a court asked the state-run fixed-line operator, Bangladesh Telegraph and Telephone Board (BTTB), to end WorldTel Bangladesh’s monopoly on landline services in the capital city of Dhaka.
WorldTel obtained a license from the Telecom Ministry of Bangladesh in 2001 to run a fixed-line network in the capital on a co-exclusivity basis with BTTB for a period of four years. Dhaka city was kept out of the open licensing regime as the WorldTel Bangladesh Ltd, a fully owned subsidiary of the UK-based Worldtel Holdings Ltd, served a legal notice to the Telecom Ministry last year pre-empting any move to open its area of operations to other companies.
The move was taken when the Bangladesh Telecommunications Regulatory Commission (BTRC) took the initiative to award about two dozen licenses under a new PSTN (Public Switched Telephone Network) licensing regime.
The BTRC, however, refrained from awarding license for the central zone comprising of Dhaka and adjacent areas and gave about two dozen licenses to interested companies.
The BTRC has segmented the country into five zones for private-sector landline telephone services.
Bangladesh, which has over five million cellular phones, has tremendous potential for growth in fixed-line telephone services. The country has a population of more than 140 million, as against only 0.9 million people using landlines currently in use. It is the only South Asian country with a teledensity of less than one.
“The fixed telephony market can have 10 percent penetration by 2007 if the market is truly liberalised,” said telecom analyst Abu Saeed Khan. He also insisted that the state-owned BTTB’s monopoly over the international voice gateway must end. “The new entrants in PSTN cannot survive unless they are allowed to set up independent international gateways. Besides there is no regulatory focus on universal service obligation (USO) and its funding.”
(www.telecomasia.net, June 10, 2005)
Dangerous Dose of Fake Medicines
Counterfeit versions of a number of medicines, including life saving drugs, are flooding the market in Bangladesh, putting patients at serious risk. Industry sources said that drugs worth about Tk 700 crore are smuggled into the country or produced there illegally each year, out of a total national drug market worth Tk 3,000 crore.
Counterfeiters are cashing in on demand as patients struggle to pay the high cost of genuine drugs. Most fake drugs are substandard in quality, and are usually of no therapeutic value. The side effects, however, can be extremely harmful.
The Bangladesh Government’s drug testing laboratory at Mahakhali identified 62 fraudulent and sub-standard copies of life saving drugs, including Amoxycillen, Tetracycline, Paracetamol, Cephexine.
Some small pharmaceutical companies were also involved with dishonest pharmacists. In 2001, the Government cancelled the licences of 44 small companies for producing counterfeit drugs. It is not known, however, how many were prosecuted. Twelve others were restricted to producing particular items. But the clampdown has not stopped the practice.
Counterfeiting flourishes because of poor governmental supervision of the pharmaceutical industry. The Government has only two testing laboratories and 34 drug supervisors for the entire country, 15 for the head office.
The leaders of the Druggists and Chemists Association pointed out that the Government was not doing enough to control the illegal manufacture and trade of drugs, and that many officials had been bribed to allow fake drugs onto the market. One source cited officials from the Drug Administration as the main culprit in the counterfeit trade.
(Daily Star, Vol. 5, No. 374, web edition)
Cambodia
Inflation Sends Food and Fuel Prices Soaring
According to the latest Consumer Price Index report released by the Royal Government of Cambodia (RGC), based on the cost of goods in Phnom Penh – Cambodia’s capital city, Cambodia’s inflation rate in April 2005 was 5.94 percent over the same month last year, and the ninth consecutive month of the year in which the inflation rate has been above five percent.
In the 18 months prior to June 2004, inflation did not rise above 3 percent and the average inflation rate in 2003 was 1.15 percent over the average rate in 2002.
The new report showed price increases in all sectors. But the highest increases recorded were for rice, beef, pork, chicken, prahoc, egg, fuel and construction material.
The price of prahoc, the major source of protein in Cambodia, was up 59 percent over last April, chicken 27 percent, chicken eggs 33 percent, gasoline 22 percent, diesel 29 percent, and lumber 44 percent.
According to Khin Song, Director of the National Institute of Statistics of Cambodia, the price hike was due to the shortage of goods in the market, as said businessmen there when they were asked about the reasons behind such high prices.
“I think the price is higher because the production is insufficient for the people in the country and we also faced shortages from the drought,” Khin Song said.
Sok Hach, Director of the Economic Institute of Cambodia, agreed that the drought contributed to April’s higher inflation rate but noted that rising fuel prices were also a factor. Drought directly contributed to a 14 percent increase in rice prices, he said.
While little can be done in the short-term to reduce the price of food, Sok Hach said the RGC could do more to lower gas prices, for example by lowering taxes, which made up around 26 percent of fuel prices.
According to Sok Hach, lowering the tax could increase revenue by decreasing smuggling, which, in turn, could lower the distribution costs of gasoline companies.
(The Cambodia Daily, 24.05.05)
Auto Sales Driven by Burgeoning Middle Class
Motorbike may still be the workhorse of Phnom Penh, but more people are driving around the city’s clogged streets in cars, SUVs and pickups, creating new business opportunities – and new problems – according to government officials, car dealers and drivers.
According to the 2004-released figures from the Ministry of Transport and Public Works of Cambodia, there were 126,446 registered car-owners in Cambodia. Of these, 15,520 were registered in 2004, up 62 percent from 9,549 in 2003 and up 171 percent from 5,717 in 1990.
Jean-Boris Roux, Country Manager for RM Asia Co, said sales are up not only due to the increased purchase by NGOs, ministries and embassies – the traditional buyers of new cars in Cambodia – but also due to individual consumers.
Roux said pick-ups were his best-selling vehicles, largely because taxes on them – 39 percent of sticker price as opposed to up to 116 percent on cars and even higher on SUVs – make them appealing to the expanding Cambodian middle class. The high taxes, he added, had led to a boom in smuggling, especially of luxury vehicles, and a burgeoning second-hand car market.
Roux cited, as an example, the case of ‘accident cars,’ many of which are imported from the US, sometimes at the price of scrap. Considered beyond repair or not worth repairing by drivers in the US, they are sold to distributors who export them en masse to Cambodia and other developing countries.
The practice is perfectly legal, Roux and other new car dealers said, but it doesn’t make already dangerous Phnom Penh roads any safer.
Michael Lam and Pily Wong, Executive Directors of Hung Hiep (Cambodia) Co Ltd, a Mercedes Benz and Hyundai dealership, cited a case where the owner of a new-looking Mercedes once came to the repair shop complaining that his breaks weren’t working. When shocked mechanics confronted the driver with the news that his brakes were in a state of complete failure and asked him how he had been driving, the driver responded that he had simply been using the emergency brake instead. In another case, the driver of a spotless Mercedes came in reporting engine troubles. When mechanics opened the hood, they found a Lexus engine instead.
“Customer safety from our angle is very important,” said Lam. “But unfortunately many people don’t care about it.” Wong added, suggesting that too often people buy new or used cars for image instead of safety and quality.
But Lam agreed that, despite hectic traffic, car ownership was steadily increasing.
“People are buying more cars in Cambodia,” he said. “And this is a good thing because there is a significant increase in the economy.”
(The Cambodia Daily, 19.07.05)
India
Competition vs. Regulation
In the current draft Amendment Bill on the Competition Act 2002, the Government of India (GOI) has proposed mandatory consultation for regulators with the competition authority, as against the earlier provision of `may’ consult. A welcome move, but better would have been an unambiguous coverage of behavioural problems in the domain of the competition authority.
A debate is on in India over the conflict between the to-be-set-up competition agency and the sectoral regulators. India still does not have an active competition authority, other than the inadequate MRTP (Monopolies and Restrictive Trade Practices) Commission. However, speculation abounds on the overlaps between the two types of agencies – the competition authority and the sectoral regulators, which are highly likely due to various factors.
First, the competition agency will be under the Ministry of Company Affairs, while the sectoral regulators are under different ministries, such as the electricity regulator is under the Ministry of Power and so on. This can lead to turf battles between the ministries and come in the way of applying competition principles.
For instance, if the Competition Commission of India (CCI) takes an action against Bharat Sanchar Nigam Limited (BSNL) for any anticompetitive practice, the Communications Minister will surely want Telecom Regulatory Authority of India (TRAI), as the sector regulator, to sort it out.
Second, sectoral laws, in their objects clause, provide for promoting competition. In fact, both sectoral regulatory laws and that on competition law are part of the competition policy rubric, which seeks to promote orderly markets.
Third, the CCI is yet to be set up properly, so there is little clarity about how it will function. Often there is a difference between the legal mandate and the operating culture, which is also moulded by court pronouncements. There is further confusion when a law does not contain the non obstante clause, or the non-derogatory principle that allows the operation of the law in pursuance of its own objectives even if there is conflict with another law. Usually, all laws contain a non obstante clause, else there will be chaos. On the other hand, such a clause can promote forum shopping, and thus clarity can only be achieved through conventions and praxis.
There is an overlap between the two regulatory institutions in other countries as well. But some have found good solutions, and embedded them in the law. Others have developed maturity and adopted good practices as conventions.
For India, France may offer the best role model. First, France has divided the role of the regulators and the competition agency. Regulators are empowered to examine the structural issues, while the competition authority looks at the behavioural issues. Whenever there is an overlap, then it is mandatory for both parties to consult each other. This has been defined in both the competition law and the sectoral regulatory laws.
In India, one problem in the structural area is of mergers and acquisitions (M&As) provisions in the Competition Act, 2002 which deal with them on the basis of some capital and turnover benchmarks. On the other hand, many of the regulators have their own guidelines on M&As, which may follow other requirements.
Such as the government guidelines on intra-circle M&As, which seek to ensure that there are at least three operators in a circle, and decisions are not based on capital employed or turnover. This could be an area of conflict, as to which law will apply to M&As in the regulated sector.
The way ahead is quite clear. In the current draft amendment Bill on the Competition Act, the Government has proposed mandatory consultation for regulators with the competition authority, as against the earlier provision of ‘May’ consult.
It is a welcome step forward, but better would have been an unambiguous coverage of behavioural problems in the exclusive domain of the competition authority. Only then can we hope to have an orderly market place.
(Pradeep Mehta, The Hindu Business Line, 16.09.05)
Lao PDR
No Barrier on Transport of Goods
Initial implementation of the agreement on cross-border transport of passengers and cargo among Greater Mekong Sub-region (GMS) countries started between Vietnam and the Lao People’s Democratic Republic and a ceremony to mark this implementation was held at the border between Dansavanh in Savannakhet, Laos and Lao Bao border. These are the first two countries to implement the GMS agreement to facilitate transport, cut time for cross-border procedures, reduce transport cost and increase competitiveness of goods, which will contribute to boosting trade, tourism and investment in the areas along the East-West corridor.
“The Lao and Vietnamese Governments have chosen the border at Dansavanh-Lao Bao to be a starting point for the agreement. This makes the border very significant for both countries because it highlights the special relationships between Lao and Vietnam and the ongoing cooperation between the two countries,” said the Lao Vice Minister of Communications, Transport, Post and Construction, Sommad Pholsena.
(Vientiane Times, 12.07.05)
Handicrafts Crucial for Lao Economy
Handicrafts have become an economic catalyst for Laos, boosting exports and tourism, in addition to playing a key role in assisting local people to generate income. The gross sale of handicraft products increased 8 percent per year on average, according to a recently released report by the Lao Ministry of Industry and Handicraft (MIH).
Private entrepreneurs invested a lot in the handicraft business, and now there are 40 handicraft units run by both local and foreign investors. Many foreign investors expressed interest in investing in traditional textile weaving. The products have great demand in the markets of Japan, Europe and USA. The value of Lao handicraft exports is expected to be worth more than US$15mn in 2005, an increase of US$5mn from 2004. In 1996, the total handicraft export of Lao was only US$118,000.
The handicraft industry is also recognised as a very important factor to help reduce poverty in remote areas, enabling rural people to earn additional income from selling their handmade products. The MIH has collaborated with local authorities to organise handicraft production groups throughout the country for mulberry cultivation, silkworm rearing, pottery and weaving.
Laos is beginning to gain an international reputation from its handicraft exports. Traditional woven textiles, jewellery and wood products are attracting the interest of many foreign customers, especially traditional designs using ethnic patterns.
Since 1990, the GOL has also been paying greater attention to development of handicrafts by urging local people to produce and design products aimed at attracting customers from both within the country and abroad. The MIH has tried to promote handicraft production in line with the ‘one district one product’ theme in accordance with government policy.
(Vientiane Times, 02.08.05)
Nepal
Why is Colgate-Palmolive Leaving Nepal?
Colgate-Palmolive India Ltd. silently suspended its Nepal operations in toothpaste production permanently but the shock in the Nepalese business community is strong. The already jittery Nepalese economy is further hit hard by the fear that the negative message this spreads can be very costly. Could this have been prevented? On scrutiny of the issue, there seem to be several other reasons behind this than just security.
Established in 1997 with an investment of Rs 540 million, Colgate-Palmolive (Nepal) Pvt. Ltd (CPNPL), a wholly owned subsidiary of Colgate India, was making sound profit initially. Three packaging companies – Essel Packaging (Nepal) Pvt. Ltd, Radhika Plastic Pvt. Ltd and Ace Packaging Pvt. Ltd. – were ancillaries to CPNPL, making tubes, lids and cartons respectively. Nepal not being the sufficient market, 97 percent of the production was being exported to India since the inception stage.
Now citing security and government policy reasons, CPNPL has permanently suspended its toothpaste production, which accounted for around half the production capacity of the unit. However, it is continuing with toothpowder production.
While the security issues could have checked the production capacity and increased the cost of production, equally challenging seems to be the export business becoming increasingly not viable commercially. The unstable industrial and tax policies of the government, procedural problems and Nepal’s inability to negotiate with the Indian Government to check the Indian central and state tax authorities to levy tax separately were no less problematic.
Moreover, the expiry of tax exemption this unit had received since its inception and the withdrawal of several tax related benefits by the Nepalese Government even before the expiry date are also considered responsible. Likewise is the Indian authorities’ insistence to impose quota on CPNPL’s exports to India.
Since the FY 2058/59, CPNPL’s competitor, Unilever Nepal, a subsidiary of Unilever, has also stopped exporting toothpaste to India and this also supports the fact that competing with Indian products is becoming difficult. While Unilever Nepal is now focusing on the local market with its diversified products, which include toothpaste, toothpowder, washing and toilet soaps, fairness cream shampoo, etc., CPNPL with its production limited to toothpaste and toothpowder was heavily dependent on the Indian market. So these export-related hassles and policies of the subsequent governments in Nepal have especially cost a lot to this company.
While the direct impact of the permanent suspension of CPNPL toothpaste production is in itself large, it can also scare away a substantial amount of foreign investments in Nepal. This recent development has highlighted that not only the conflict but also the loopholes in policies are posing equally formidable disincentives to business.
(New Business Age, August 2005)
A Phoney Business: Nepal Telecom Sacrificed
Nepal Telecom’s recent decision to finally resume the pre-paid mobile service is seen as the Government’s response to increasing public pressure and the threat of agitation by Telecom employees.
It could also have been an effort to deflect widespread coverage of the alleged link between restriction on mobiles imposed after the royal move on February 1, 2005 on security grounds and favouritism towards Nepal’s first private mobile operator in which King Gyanendra’s son-in-law has a share.
Of the 173,000 mobile phone lines that were cut off on February 1, only 40,000 post paid lines in Kathmandu, Pokhara and Biratnagar have been reconnected. Some 111,000 pre-paid mobiles were out of action for more than six months and Nepal Telecom has started activating about 12,000 of them per day in Kathmandu in late August. Other 20,000 post-paid lines in Kathmandu and other metros are still out. Nepal Telecom has been allowed to issue only a limited number of new mobiles, and it has been forced to delay its plans to launch a CDMA wireless phone network in the Kathmandu Valley.
To be sure, as a Government monopoly, Nepal Telecom always treated its customers shabbily. Its technology was behind demand leading to poor service, high cost and lack of innovation. But employees of the company are convinced that after February 1, the Government was delaying full resumption of Nepal Telecom’s services in order to favour Spice Nepal Pvt Ltd (SNPL), in which King Gyanendra’s son-in-law Raj Bahadur Singh owns a stake.
The Ministry of Information and Communications said Nepal Telecom’s services had been cut for security reasons. But the army’s public relations office said: “Any decision to reopen old services or new ones is up to the Ministry and Nepal Telecom, we have nothing to do with it.”
“On the one hand, they have given SNPL another three months, but they have told us not to re-start our CDMA Project till November,” says Tanka Lal Shrestha of the Nepal Telecom Employees’ Union, “this is a strategy to keep us out of the competition till SNPL comes into the market.”
Nepal Telecom had to stop all mobiles from February to May, customers had to go through cumbersome re-registration, only 80 percent of Kathmandu’s post-paid mobile were activated, pre-paid phones are being gradually put back, phones in other cities have still not been resumed.
Officials at the Nepal Telecommunications Authority declined to be interviewed for this article.
One official at the Ministry of Information and Communication revealed: “Spice was obviously worried that Nepal Telecom would have captured 90 percent of the market with its new mobiles and CDMA even before it launched its service, and it used all its political clout to delay Nepal Telecom’s plans.” He admitted Nepal Telecom’s monopoly had resulted in poor service to customers, but added competition must be clean and fair.
(Nepali Times, Issue 262, 26.08.05)
Vietnam
Foreign Banks Eyeing Vietnam Domestic Market
Financial experts have forecast a growing trend in foreign banks buying shares in Vietnam’s commercial banks. Foreign banks are buying shares to expand their operations in Vietnam and in this way they are obtaining the existing networks set up by the domestic banks, said Le Xuan Nghia, Head of the Banking Development Strategy Department under the State Bank of Vietnam (SBV).
In addition, purchasing Vietnamese banks also assists in targeting Vietnamese clients. UK-based Hong Kong and Shanghai Banking Corporation (HSBC), a wholesale bank that serves corporate clients, has announced an ambitious plan on conquering the Vietnam domestic market.
Australian based ANZ and UK-based Standard Chartered banks have finalised deals on buying shares in Vietnam’s Saigon Thuong Tin (Sacombank) and Asia Commercial Bank, respectively. The share volume held by each investor is less than the allowed 10 percent of total shares, however, experts believe this percentage will rise in the future.
The State Bank has not confirmed any further deals, however, insiders say that there are currently around 10 foreign and domestic banks in negotiation, including US-based Citibank and French Calyon.
Nghia stressed that it is quite normal to see foreign banks inject money into Vietnamese banks. The purchasing deals can satisfy demand of both foreign and domestic banks. The former buy shares to serve their expansion plans, while the latter aim at raising capital and introducing modern banking technologies
Kieu Huu Dung, Head of Banks and Financial Institutions under SBV, shares the same view, saying there is no need to worry about foreign banks swallowing up domestic ones. “We must accept the rules of a market economy,” he said.
(VietnamNet, 01.09.05)
Duckling Monopsony
Many poultry slaughterhouses in Ho Chi Minh City have been forced to close down their business recently since they could not get any supply. Thousands of household in Long An district, Tay Ninh province, who used to supply ducks to these slaughterhouses, now forced to sell their ducks to only the Huynh Gia Huynh De Company in Ho Chi Minh City, are lodging their complaints.
The duck-breeding households’ complaints were against the decision of the Long An Veterinary Department forcing them to sell their ducks only to the Huynh Gia Huynh De Co. According to the decision, farmers would not be given transportation permits if they wanted to sell their ducks to any other businesses. Huynh Gia Huynh De Co, therefore, could impose any price level for their purchases on the sellers.
Tran Thi My Le, owner of the Tan Thanh duck-breeding farmhouse based in the Tan An Commune (Long An), said, “The decision of the of the Long An Veterinary Department instructing us to sell our ducks only to the Huynh Gia Huynh De Co has caused us great price losses. We got around VND5000-10000 less for each kilogram of duck sold to this company, as compared to the selling prices to other businesses.”
Other farmhouse owners in Tay Ninh province also lodged the same complaints, saying that the decision had bestowed monopsonistic power on the Huynh Gia Huynh De Co, resulting in price loss for farmers. The current selling price on the market was VND32000 per kilogram, while the Huynh Gia Huynh De Co only purchased ducks from farmers at the rate of VND18000-20000 per kilogram. Therefore, for each duck whose weight ranges from 2.9 kilogram to 03 kilogram, the farmers would lose around VND30000-40000.
The decision also resulted in more than 50 duck slaughterhouses in the Binh Hung Commune, Binh Chanh Dictrict (Ho Chi Minh City) not being able to get any supply from two of their major former supply sources, Long An and Tay Ninh provinces. A slaughterhouse owner in Binh Chanh said, “We have given loans to some duck-breeding farmhouses in Long An and Tay Ninh, so that they can expand their production, with agreements that we will get a stable supply of ducks from them. However, these days, even when the ducks are ready for being put into the markets, having been tested for bird flu, the Veterinary Departments in these two provinces would not give the farmers the permits to supply to our slaughterhouse, and only to Huynh Gia Huynh De Co. Without their supply, we have had to close for more than 20 days, with loss amounting to nearly VND70mn.”
Whose evil?
On April 29, 2005, the Ministry of Agriculture and Rural Development of Vietnam issued the Official Notice No. 1844 requiring all provincial authorities in Vietnam not to permit any transportation of poultry out of their provinces. Ton That Han, Head of the Tay Ninh Veterinary Department, admitted, “We are still issuing transportation permits, though this practice is against the Ministry’s Notice. However, this is to protect the interests of the farmers since poultry is their major means of living in the province, especially when the poultry have been tested against bird flu.”
“We, however, cannot allow transportation of poultry to Ho Chi Minh City without the consent of the City Veterinary Department,” added Han. Answering the questions why allowing the farmers to sell their ducks to only the Huynh Gia Huynh De Co, Mr. Han told the reporters that any company which had applied would be granted permits. However, until then the Tay Ninh Veterinary Department had received only the Huynh Gia Huynh De Co’s application.
Han also said that in a recent meeting, the Veterinary Department of Ho Chi Minh City had suggested that the Huynh Gia Huynh De Co did good business and should be given permits. However, when asked whether the Veterinary Department of Ho Chi Minh City had sent them any official letter giving consent for the permit to be given to the Huynh Gia Huynh De Co, Han said there was no such letter and the suggestion had only been made verbally.
On the other hand, Huynh Huu Loi, Head of the Veterinary Department of Ho Chi Minh City, said, “We did not playing any role in giving the Huynh Gia Huynh De Co their current monopsony position. Issuance of permits is solely under the authority of provincial authorities, depending on the safety level proven. Price fluctuations are to be decided by the markets.”
In the face of the strong complaints made by farmers as well as other slaughterhouses, the Veterinary Departments of Tay Ninh and Long An provinces have withdrawn the permits given to the Huynh Gia Huynh De Co, disallowing altogether the sale and transportation of ducks to Ho Chi Minh City.
(VietnamNet Bridge, 01.09.05)
Cheating Consumer Promotion
Ngo Van Chau, from the Hoa Khuong Commune, Hoa Vang District, recently complained with the Department for Consumer Protection that he had not been given an amount of VND30mn as promotional award despite being qualified for the same under the IZZI Milk promotion programme.
On July 19, 2005, Chau bought a block of IZZI milk cans, product of the Lysine Milk Company (under the Hanoi Milk Company) at a retailing shop. After scratching the silver portion on the promotional ticket, he saw that he was qualified for ‘a scholarship worth VND30mn’ within the promotional period from April 15, 2005 to August 15, 2005.
The next day, Chau contacted the branch office of the Lysine Milk Company (at No. 172, Nguyen Tri Phuong Str., Da Nang City, Vietnam) for the award. He was told by the branch staff that, “The promotional ticket is not in conformity with the company regulations. It must be due to technical mistake. You can wait for us to contact the headquarter or can consult the company headquarter directly.”
Consulting the Da Nang branch office of the Hanoi Milk Company, Chau was told by the branch head, Truong Ba Chau, that, “You should contact the Hanoi Milk Company headquarter directly. We are not aware of the regulations since we are just a branch office.” According to Trung, the Hanoi headquarter had also just contacted them to take picture of Chau’s promotional ticket for further consideration.
Vu Hanh, Marketing Manager of the Hanoi Milk Company, told the media that Chau’s promotional ticket was not qualified, since it had not been registered with the Ministry of Trade for this promotion programme.
(The Vietnam Labour Magazine, 29.07.05)