Behind Ensure's Discriminatory Label

According to Thanh Nien reporter's source, 3 ministries including Finance, Industry and Trade, and Health have just received a request from the National Steering Committee against smuggling, trade fraud and counterfeit goods (Committee 389) regarding the management of import and circulation of liquid Ensure nutritional products.

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

Accordingly, the liquid nutritional product Ensure is currently imported and sold a lot on the market but does not meet the conditions of food safety and import regulations.

How to create exclusivity

According to Thanh Nien reporter's report on January 6, there are currently two types of Ensure liquid supplements on the market: one is the Ensure Gold Vigor 237 ml brand, exclusively distributed by 3A Nutrition Company Limited (3A Company) for Abbott in Vietnam, and one is Ensure Nutrition Shake imported by other companies. After Abbott Company acquired 3A Company, its previous nutrition product distribution partner in Vietnam, in 2013, Abbott began to make changes in labeling.

On one side, Abbott clearly printed the product Ensure Gold Vigor 237 ml distributed by 3A in Vietnam, on the other side, it printed the words "Not to be sold in Vietnam or Mexico" on the Ensure Nutrition Shake products. Since August 2014, the Ministry of Health has issued a regulation that does not allow units to check the quality of liquid Ensure products with the above words printed on them (which means they are not allowed to be imported). Thus, these products on the market have naturally become contraband and unintentionally created a shield to protect the import monopoly of 3A Company.

The National Steering Committee 389 also believes that the manufacturer (Abbott Laboratories - USA) and 3A Company have signs of creating a monopoly in the distribution of Ensure liquid products in Vietnam, affecting the interests of consumers. Notably, in early 2013, Abbott Laboratories in the US printed on the label of the vanilla-flavored Ensure liquid product (a product consumed quite a lot in the Vietnamese market - NV) the words "Not to be sold in Vietnam or Mexico". After this product was not imported into Vietnam, the import turnover of similar products by 3A Company skyrocketed to 63%. The selling price of this product is also nearly double the selling price of similar products.

Responding to Thanh Nien, a representative of Abbott Vietnam said: “Because Vietnam and Mexico are two countries where smuggling is quite common, the manufacturer printed this line to distinguish between officially distributed products and imported products. In addition, due to 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 imported liquid Ensure products, affirmed: “Printing this additional line is a trick to create exclusivity for importer 3A. In fact, this product is still consumed in the US, so of course the quality must be guaranteed and must meet strict health safety criteria. With such a vague warning trick, Abbott has succeeded in dominating the Vietnamese market. Other importing businesses, including me, cannot compete. I have had to stop importing Ensure milk for more than a year now and other businesses that I know cannot officially import. Products on the market that are not distributed by 3A are illegal imports or smuggled goods.”

According to our survey in the Ho Chi Minh City market yesterday, the retail price between the two products has a large difference, while the product Ensure Gold Vigor distributed by 3A Company costs 45,000 VND/bottle, the product Ensure Nutrition Shake is only 30,000 VND/bottle.

Remove discriminatory words, allow more businesses to import?

One strange thing is that in August 2014, after the Ministry of Health did not allow quality control units for Ensure liquid products printed with the words "not for sale in Vietnam and Mexico", the smuggling of this product increased rapidly, according to the document of Steering Committee 389.

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

Faced with the above reality, the Steering Committee 389 has issued an official dispatch requesting all three ministries: Finance, Health, and Industry and Trade to review, amend, and supplement a number of regulations in the field of imported food in general and especially for the liquid nutritional product Ensure. Specifically, the Ministry of Health is required to work with Abbott Laboratories to clarify the quality of Ensure products whose packaging has the words "Not to be sold in VN or Mexico"; if this labeling is only to prevent smuggling and this product is still freely circulating in the country of manufacture and ensuring safety for users, measures must be taken to request this company to replace the labeling of the discriminatory and discriminatory words above. The Ministry of Health is also required to amend and supplement a number of regulations to allow other businesses, if qualified, to also be allowed to import to avoid monopoly.

The Ministry of Finance has also been requested to review and inspect the tax payment obligations of enterprises importing Ensure liquid nutritional products; direct the General Department of Customs to strengthen inspection and control of import activities of the above products; investigate and verify acts of forging documents and papers to request confirmation and declaration of product quality.

According to Thanhnien