Hanoi (VNA) - Small and medium sized firms are being crushedand elbowed out in the increasingly fierce competition to become a supermarketsupplier.

This has sparked accusations of unfair purchase policies and the counterresponse that supermarkets make rational buying decisions and are willing tohelp producers and distributors.

With supermarkets occupying an increasing share of the retail market, supplyingconsumer goods to this channel has become more important.

Ngo Duc Sinh, Chairman of Hoa Binh province’s Kim Boi Agriculture and Forestry ProductsJSC, told the Public Security News (Cong An Nhan Dan) newspaper,official information channel of the Ministry of Public Security, that thereseemed to be no uniformity or reliability in assessing goods and choosingsuppliers. 

Speaking at a networking event organised by the HCM City’s Department ofIndustry and Trade, Sinh said that, having his company’s products present inmost major supermarkets and convenience stores, he saw that the same productwas welcomed by one and rejected by another.

However, Ho Quoc Nguyen, head of Big C Vietnam’s Public Relations, said asquoted by the paper that supermarkets understand the relationship betweenproducers and distributors.

Even if some small suppliers complain about discrimination, he said he believedthe distribution system has done the right job, and was willing to listen andsolve firms’ difficulties.

Nguyen said that his company gave equal treatment to suppliers of all sizes,asking that they meet two basic conditions of clear product origin and certifiedquality.

If the products have not been periodically tested or do not meet hygiene andsafety standards, supermarkets have no choice but to reject them, he added.

Nguyen Huynh Trang, deputy director of HCM City’s Department of Industry andTrade, said that with so many local enterprises looking to enter thesupermarket roster, both suppliers and distributors must define keycommodities, price strategies and mutual benefit criteria to ensure stabledemand and supply.

Despite the claims, however, it does seem that major supermarkets are aplayground for large enterprises, not small and medium ones; and the problemdoes not simply lie in sampling, packaging or price, but financial power andinfluence. This was elucidated by Ho Minh Chính, Director of HCM City-basedK.A.S Sales Training Centre.

He told the Phap Luat Online (PLO), a news outlet of the HCM City’sDepartment of Justice, that 80 percent of goods sold in big supermarkets comefrom the top 20 percent of companies that are able to offer high discounts andrun prolonged advertisement campaigns.

He gave the example of small businesses having to wait up to one year beforetheir products could go on sale in supermarkets due to strict qualityinspections, apart from offering trade discounts of between 15 and 25 percent.

This makes it difficult for the smaller players unable to match their largepeers in producing at lower costs and offering lower prices.
He advised that firms choose distribution channels based on their productivity,financial capacity and customer demographic, instead of looking at supermarketsas a be-all-end-all outlet.

Nguyen Thi Binh Minh, LOTTE Mart Vietnam’s Fresh Food Sales Director, toldthe PLO that some supermarkets have to extend their account payablesfor smaller firms to 60 days, as opposed to the 15-30 days payment window.

She said the delay could be blamed on both producers and distributors’ fault,and suggested businesses have a solid, short-term plan to make themselves knownto buyers, so that distributors can avoid having goods on their shelves forlonger periods.

She also recommended that firms improve their packaging and labeling, likeagricultural products having correct geographical indications, or transparentwrapping showing actual goods inside the package.-VNA