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Official Gazette

Wednesday, July 18, 2018

Draft decree on commercial infrastructure management sparks concerns

Updated: 08:10’ - 01/07/2018
The Ministry of Industry and Trade (MoIT) is seeking opinions from relevant sectors on its draft decree on the development and management of the country’s commercial infrastructure.

Under the draft, retail businesses must satisfy standards to be called “supermarkets” or “shopping malls”. Specifically, each supermarket must have an area of 250-10,000 sq. m. They must also meet the requirements on construction, equipment, storage, and services for people with disabilities as well as children.

Supermarkets and shopping malls would be asked to remain open on all days of the weeks, including holidays, from 10am to 10pm.

The draft decree requires each supermarket to have an area of 250-10,000 sq. m__Photo: VNA

The draft decree goes on to stipulate that supermarkets must not run more than three sales promotion programs a year, with each program lasting for at least 30 days and covering at least 70 percent of the goods they have, and there must be an interval of at least one month between two programs.

In addition, the draft requires that goods supplied by local small- and medium-sized enterprises must account for at least 30 percent of goods on shelves at supermarkets.

Nguyen Van Hoi, Deputy Director of the MoIT’s Domestic Market Department, told local media that draft decree aimed to set up a legal foundation, thus creating a transparent and favorable environment for various retail forms such as markets, supermarkets, trade centers, shopping malls, convenience stores, and related business activities.

“The draft decree would neither create more business conditions nor require more licenses hindering business operations of enterprises,” Hoi was quoted by the Viet Nam News daily.

However, it appears that the business circle thinks the opposite. 

Commenting on the draft decree’s provisions on sales promotion, the Vietnam Chamber of Commerce and Industry said these provisions demonstrated the MoIT’s deep intervention in retailers’ business.

If the ministry fears that the sales promotion programs will affect competitiveness in the market, it needs to control these activities in accordance with competition laws, according to VCCI. 

Dinh Thi My Loan, chairwoman of the Association of Vietnam Retailers (ARV), told the Vietnam Investment Review that the regulations on trading hours of supermarkets are against international practice.

“Other countries restrict long working periods at supermarkets as bigger retailers so that small stores can benefit from their unrestricted opening hours, as well as to protect the labor force of the industry”, Loan said.

As for the condition that supermarkets must have an area of between 250 and 10,000sq.m, a staff member of a Co.op Mart Foodcosa store in Ho Chi Minh City that covers an area of 17,000sq.m. said: “It is an odd situation. Since we are a supermarket bigger than 10,000sq.m, we might be not allowed to be labeled as a supermarket. And yet, we are certainly not a shopping mall. So what are we?”  

Regarding the requirement to seek sources of supply from local suppliers, according to AVR,  it was difficult to apply in foreign-invested supermarkets, especially against of backdrop of Vietnam’s accession to international trade agreements under which foreign goods are imported with lowered or no tariffs, Vietnam Investment Review reported.

In response to these comments, the MoIT said it was only a draft and would be further improved.- (VLLF)
 
 

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