VN Retailers’ Association objects to proposed business requirements for supermarkets

  • June 07, 2018

The Vietnam Retailers Association has objected to a draft Government decree on development and management of the distribution sector, especially proposed regulations on supermarkets.

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The Government and the Ministry of Industry and Trade are trying to slash unnecessary business conditions to make life easier for enterprises. However, the draft decree, prepared by the Ministry of Industry and Trade, would create new business conditions, which is contrary to the ongoing effort by the Government to simplify administration procedures.

Earlier, Prime Minister Nguyen Xuan Phuc asked the ministry to review Government decrees 2 and 114 on development and management of markets. However, the draft decree is intended to strengthen the management of the entire distribution sector, not just markets.

The wider scope of management of stores, auction centers, supermarkets and shopping centers as seen in the draft decree is beyond what the Prime Minister requires, according to the Vietnam Retailers Association.

The draft decree falls short of expectations of the association as many regulations in the draft decree are unreasonable.

The association suggests the ministry remove requirements for other forms of distribution, except for markets, from the draft decree.

The proposed regulation that supermarkets should have an area of between 250 and 10,000 square meters does not reflect the reality and limits the operational scale of retailers, according to the association’s chairwoman Dinh Thi My Loan.

Loan wondered if the current supermarkets which are more than 10,000 square meters fail to be classified as shopping centers. “How will they be classified?” she asked.

The draft decree specifies the operators of supermarkets and shopping centers must ensure stable sources of goods by placing orders with producers.

The draft decree also demands domestic companies be favored when it comes to using legal or other professional services. The association notes this regulation unnecessarily restricts the rights of supermarkets and shopping centers, and may violate Vietnam’s commitments to the World Trade Organization.

Earlier, the Vietnam Chamber of Commerce and Industry (VCCI) said the proposed regulations on sale promotion programs demonstrate the ministry’s unnecessarily deep intervention in retailers’ operations.

For example, supermarkets and shopping centers should not run more than three sales promotion programs a year, and each program should last at least 30 days, according to the draft decree. The next program can only be launched at least 30 days after the previous one.

At least 70% of goods available at supermarkets and shopping centers must be covered by the programs as well, says the draft.

“If the ministry fears sales promotion programs at supermarkets and shopping centers harm competition, it should control such activities in line with the Competition Law,” VCCI said.

Source: VietNamNet

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