Behind Ensure's discriminatory labeling

According to sources from Thanh Nien newspaper, three ministries—Finance, Industry and Trade, and Health—have just received a request from the National Steering Committee against Smuggling, Commercial Fraud, and Counterfeit Goods (Committee 389) regarding the management of the import and circulation of Ensure liquid nutritional supplements.

3A Company is the exclusive distributor of Ensure nutritional products in Vietnam.

Accordingly, Ensure liquid nutritional supplements are currently imported and sold extensively on the market, but they do not meet food safety standards and import regulations.

Tactics for creating a monopoly.

According to observations by Thanh Nien newspaper reporters on January 6th, there are currently two types of Ensure liquid nutritional supplements on the market: one is Ensure Gold Vigor 237 ml, exclusively distributed in Vietnam by 3A Nutrition Co., Ltd. (3A Company), and the other is Ensure Nutrition Shake, imported by other companies. After Abbott acquired 3A Company, its previous nutritional product distribution partner in Vietnam, Abbott began making changes to its labeling in 2013.

On one hand, Abbott clearly labels Ensure Gold Vigor 237 ml as distributed by 3A in Vietnam, while on the other hand, it adds the phrase "Not to be sold in Vietnam or Mexico" to Ensure Nutrition Shake products. Since August 2014, the Ministry of Health has issued regulations prohibiting quality control of Ensure liquid products bearing this label (meaning they are not allowed to be imported). Thus, these products on the market are implicitly considered smuggled goods, inadvertently creating a shield to protect 3A's import monopoly.

The National Steering Committee 389 also believes that the manufacturer (Abbott Laboratories - USA) and 3A Company show signs of creating a monopoly in the distribution of Ensure liquid products in Vietnam, affecting the rights of consumers. Notably, in early 2013, Abbott Laboratories in the USA added the phrase "Not to be sold in Vietnam or Mexico" to the label of its Ensure liquid vanilla-flavored product (a product that is quite popular in the Vietnamese market). After this product was banned from import into Vietnam, the import value of similar products by 3A Company skyrocketed by 63%. The selling price of this product was also nearly double that of similar products.

Responding to Thanh Nien newspaper, a representative from Abbott Vietnam stated: “Because Vietnam and Mexico are two countries where smuggling is quite common, the manufacturer added this phrase to distinguish officially distributed products from imported products. In addition, due to differences in the physical characteristics of consumers in different countries, there are also certain differences between products.”

Meanwhile, Mr. Nguyen Thanh Bich, director of a company that previously imported Ensure liquid products, asserted: “Adding this warning is a tactic to create a monopoly for the importer 3A. In reality, this product is still sold in the US, so of course its quality must be guaranteed and meet all the strict health and safety criteria. With such vague warnings, Abbott has successfully dominated the Vietnamese market. Other importing businesses, including mine, cannot compete. I have had to stop importing Ensure milk for over a year now, and other businesses I know cannot import it officially either. Products on the market that are not distributed by 3A are either illegally imported or smuggled goods.”

According to our survey of the Ho Chi Minh City market yesterday, there is a significant price difference between the two products. While Ensure Gold Vigor, distributed by 3A Company, costs 45,000 VND/bottle, Ensure Nutrition Shake costs only 30,000 VND/bottle.

Remove the discriminatory labeling and allow more businesses to import?

Interestingly, in August 2014, after the Ministry of Health prohibited quality control checks on Ensure liquid products bearing the inscription "not for sale in Vietnam and Mexico," smuggling of this product increased rapidly, according to a document from the Steering Committee 389.

On the other hand, according to data from the General Department of Customs, the total import value of Ensure liquid nutritional supplement alone in 2013 was approximately 700 billion VND. Of this amount, 3A Company accounted for about 300 billion VND. "With the current smuggling situation, the state budget loses approximately 40-50 billion VND in tax revenue from this product each year, while consumers are not guaranteed food safety and hygiene," the Steering Committee 389 stated.

In light of the above situation, the Steering Committee 389 has issued a document requesting all three ministries: Finance, Health, and Industry and Trade, to review, amend, and supplement several regulations in the field of imported food in general, and especially regarding Ensure liquid nutritional supplements. Specifically, the Ministry of Health was requested to work with Abbott Laboratories to clarify the quality of Ensure products whose packaging bears the inscription "Not to be sold in Vietnam or Mexico"; if this inscription is solely intended to prevent smuggling and the product is still freely circulated in the country of origin and is safe for consumers, then measures must be taken to request the company to replace the discriminatory inscription. The Ministry of Health was also requested to amend and supplement some regulations to allow other qualified businesses to import the product to avoid monopolies.

The Ministry of Finance has also been requested to review and inspect the tax obligations of businesses importing Ensure liquid nutritional supplements; to direct the General Department of Customs to strengthen inspection and control of import activities of this product; and to investigate and verify acts of falsifying documents to obtain product quality certification and declaration.

According to Thanhnien