Big distributors in Hanoi, namely Big C, Intimex, Fivimart and Phu Thai Group, said that they had not received any announcement about price decreases from suppliers. The prices of most products had been raised before the decision on tax reduction, and remain unchanged since then.

State authorities should have direct working sessions with producers and distributors to find out the reasons why enterprises have not reduced prices yet, ask them to give explanations and make commitments to reduce prices.

The prices of meat, dairy products, eggs and vegetable oil have not seen any adjustments compared to the ones before August 8. Meanwhile, the price of rice rose by VND100-200/kg last week, and sugar by VND100-500/kg.

Importers said that they could not reduce prices because the products now on sale were the ones imported before the tax reduction came into effect. However, the reason has not been accepted.

Analysts said that with the tax reduction, the tax reduction would benefit importers first. The importers can reduce prices of many items while not incurring loss. However, they have not done that.

Hoang Huong, Director of Huong Thuy Trading Company, the importer of 256 items of 19 brand names, mainly food, said that no item would see a price decrease. She said that the tax reduction was only applied on some import items, not items Huong Thuy imports and distributes.

Meanwhile, Mrs Huong must have known that the government had cut the taxes on butter and dairy products, which are the import items of Huong Thuy.

The prices of dairy products of Mead Johnson, Abbot, Dumex and Nestle remain at high levels. Enfapro A+ 900 g, for example, is still selling at $242-248,000/can. Meanwhile, an agent of Vinamilk said that a tin of condensed milk would increase from VND8,100/unit to VND8,500/unit next week, since the product was selling very well.

Analysts said that the sharp tax reduction would certainly lead to price decreases. A can of milk, for example, now bears the tax of 10% instead of 20%, thus leading to the decrease of $1 in selling prices.

However, cutting taxes and reducing prices are two different stories. Importers and distributors seem to be ignoring the efforts of the government to stop price increases. They are still trying to keep prices at a high level in order to make fat profit.

In order to control prices, the government should initiate policies which can create impacts directly on local production, and other comprehensive measures on the national economy. The single solution of cutting taxes will not help resolve problems, Deputy Director of Big C Thang Long Supermart Nguyen Thai Dung said.

Meanwhile, Deputy Director General of Phu Thai Group Dinh Doan said that state management agencies should call for the support of importers and distributors for the government’s campaign to curb inflation.

Source:  VietnamNet.