Vietnamese suppliers cry out after Big C turns the screw

By Toan Dao   May 10, 2016 | 05:32 pm GMT+7

Vietnamese suppliers to Big C, which has recently been acquired by a Thai investor, have expressed concerns over the supermarket chain’s recent demands involving discounts, a statement on the government portal said on Tuesday.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), Big C is asking for higher discounts as part of new contracts for 2016. The new rates will increase by up to five percent to about 17 to 20 percent, and even 25 percent for some products.

The demands come after Thailand’s Central Group announced on April 29 that it had acquired Big C’s operations in Vietnam from France's Casino Group at a cost of 1 billion euros ($1.14 billion).

VASEP recently sent Big C a letter asking the supermarket not to ask for higher discounts on the products the chain purchases and to reduce the rates on the seafood it sells to below 15 percent. Nguyen Hoai Nam, deputy general secretary of VASEP, said no suppliers could continue to cooperate with Big C if the supermarket insists these terms. “Many suppliers are paying discounts of 17-20 percent on average, and even 25 percent. Companies will incur losses and will not able be able to reinvest with these very high rates,” the letter from VASEP said.

But Ho Quoc Nguyen, public relations director at Big C, said: “Big C is not putting pressure on any suppliers. We are willing to accept any products on offer for reasonable discounts. Currently, 90-95 percent of products sold by Big C are Vietnamese, so it is not true to say we are forcing out Vietnamese products to make way for Thai goods,” he said.

Nguyen said suppliers who complain about the discounts should send letters directly to Big C, and the supermarket will respond to each query.

Vo Van Quyen, director of the Domestic Market Department under the Ministry of Industry and Trade, said the trading operations between companies and supermarkets are based on the market. The government will only intervene if companies show evidence that their products are being treated unfairly.

 
 
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