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Vietnam’s Cao Thanh Phat Company has signed a contract with Thailand’s consumer goods group TCC Holding Co. Ltd to sell the first 100 tons of dragon fruit to Big C Thailand.
Products from Cao Thanh Phat in the central province of Binh Thuan fully meet Vietnamese Good Agriculture Practice (VietGap) and GlobalGap quality standards, the company’s managing director Nguyen Cung Kinh said in a statement Monday.
The deal was inked amid worries from Vietnamese suppliers that local products will find it hard to enter leading supermarket chains in Vietnam following acquisitions from TCC and other Thai investors.
In January this year, TCC completed its acquisition of Metro Vietnam for 655 million euros ($704.1 million).
The Thai firm has also acquired a 25 percent stake in Big C operations in Thailand from Thai Central Group, which bought Big C’s operations in Vietnam from France's Casino Group for one billion euros ($1.14 billion) earlier this year.
Vietnam’s Prime Minister Nguyen Xuan Phuc urged Charoen Sirivadhanabhakdi, chairman of TCC, to buy more products from Vietnam to sell in its supermarkets during a meeting on July 8.
In response, Charoen said that TCC is seeking permission to buy Vietnamese oranges, sweet potatoes, limes, star apples, sapodilla and rice powder to sell in Thailand and other countries.
Vietnamese suppliers to Big C in May expressed concerns over the supermarket chain’s recent demands involving discounts. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), Big C was asking for higher discounts as part of new contracts for 2016. The new rates will increase from 5 percent to about 17 to 20 percent, and even 25 percent for some products.
The demands came after Thai Central Group announced on April 29 that it had acquired Big C’s operations in Vietnam from France's Casino Group.
From January-June this year, Vietnam exported 4,608 tons of fresh fruit, mainly to the U.S., Japan, South Korea, New Zealand and Australia, of which 72 per cent was dragon fruit, Vietnam News Agency reported last week, citing data from the Vietnam Fruit and Vegetables Association.
Dragon fruit exports are expected to rise after Taiwan’s suspension on fruit imports from Vietnam is lifted. Taiwan plans to import 14,000-16,000 tons of dragon fruit per year.
Vietnam hopes to gain $2 billion from fruit and vegetable exports this year, according to the association.
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