Foreign milk is cleverly "dodging" the law, increasing selling prices

After a period of using the "trick" of changing product packaging to increase selling prices, some milk companies have now continued to change the age range for children to "push" the selling price up by a few tens of thousands of VND/box compared to before.

Change age to increase price

After searching 3 agents, Ms. Ha still could not find the Enfagrow A+3 360-degree Brain Plus milk for children from 1-3 years old that her child used before. Instead, she found the same type of milk in the same packaging but with a new age division.

Ms. Hong - owner of a milk store on Lo Duc Street (Hanoi) said that Mead Johnson launched a new product more than 2 months ago and along with that changed the age division for children. Specifically, if previously the Enfamil A+3 Brain Plus product line was for children from 1-3 years old, now it is only for children from 1-2 years old. If children are 3 years old or older, they will switch to step 4.

For the Enfamil 360 degree Brain Plus step 3 milk line for children from 1-3 years old, all dealers reported "out of stock", to buy the old milk, Ms. Ha had to go to a large supermarket on Tay Son Street (Hanoi). When asking about the difference between the two "twin" product lines but different in age division, Ms. Ha was explained by the supermarket milk counter staff that the new Enfamil 360 degree Brain Plus line with changed age will gradually replace the Enfamil 360 degree Brain Plus line launched nearly 1 year ago.

Comparing the formula of the new packaging for children aged 1-2 years old and the old packaging (for children aged 1-3 years old), it is easy to see that the new product has no breakthrough or difference in formula. Basically, the content of ingredients has not changed or has changed insignificantly.

Changing the age for children, milk price "increased" by several tens of thousands of dong/box compared to before.

Along with the change in age, the selling price is also higher than before. For example, the price of each box of Enfamil A+3 Brain Plus milk for children from 1-2 years old is currently 424,000 - 429,000 VND/box of 900 grams, while the previous price for this type of milk for children from 1-3 years old was only 370,000 - 380,000 VND/box of 900 grams depending on the dealer.

Thus, after changing the packaging by re-dividing the age for children, the price of each box of this type of milk has increased by about 50,000 VND/box. Or at Lotte Mart supermarket (Tay Son - Hanoi), the new Enfagrow A+4 Brain Plus line for children 2 years and older is priced at 403,000 VND/900 gram box, while the old type for children 3 years and older is only 371,000 VND/box; the 400 gram type is priced at 183,000 VND/box and 197,000 VND/box, respectively.

Confused consumers

From March 1, 2015, according to Decree 100/2014/ND-CP, advertising of milk products for children under 2 years old is prohibited, which means that milk production and trading enterprises in the process of declaring prices will have to remove advertising costs from the selling price to consumers. For a long time, advertising costs have been an excuse for milk companies to keep prices high, accounting for 20%, even 30% of the cost of milk products.

Even the inspection results of the Ministry of Finance in 2014 showed that the "insertion" of advertising costs into the price of milk has caused the price of this product for children under 6 years old to increase by 2.18-16.39%. Therefore, the regulation prohibiting advertising and removing advertising costs from the price of milk for children under 24 months old from March 1, 2015 is expected by the Price Management Department (Ministry of Finance) to help the selling price of milk products for children under 24 months old return to their true value.

But in reality, up to now, apart from changing the age to push up the price, the prices of other milk products at the agents have not decreased but are still "standing" at a high level.

According to a survey by Infonet reporters, Enfamil A+ 1 Brain Plus costs 500,000 - 505,000 VND/900 gram box, Enfamil A+ 2 Brain Plus costs 482,000 - 490,000 VND/900 gram box; Abbott Grow No. 3 costs 255,000 - 275,000 VND/900 gram box, Friso Gold No. 4 900 gram type costs 379,000 - 385,000 VND/box...

Does the price management agency know that despite the regulation on advertising costs, milk prices are still increasing instead of decreasing? Along with that, milk companies “dodge” by changing packaging and dividing age groups to increase milk prices…?

Responding to questions at the Ministry of Finance's press conference held on April 7, the leader of the Price Management Department said that according to the new regulations on banning advertising for milk for children under 2 years old, the Department has sent an official dispatch to the local Department of Finance that in the process of receiving price declarations from enterprises, advertising costs must be excluded from the cost price and businesses must declare prices before April 15.

Based on the results of the enterprises' price declarations, the Department will conduct inspections and controls. "We have to wait until after April 15 to see how the enterprises declare their prices before we can answer whether milk prices have increased or not," he said.

Thus, although according to the price management agency's leaders, we have to wait until April 15 to know whether milk prices will increase or decrease, but from reality and with the current "tricks" to avoid product prices, consumers still find it difficult to expect milk prices to really decrease. In the maze of milk prices, many consumers are bewildered and confused. Just thinking about the fact that milk companies now change this packaging, that age and increase the selling price, every month mothers have to "open their wallets" a few hundred thousand more dong to buy milk for their children.

According to Infonet