Price stabilizing businesses struggle to survive

Nguyen Dang Phu, deputy CEO of food processor Vissan, said that although regulations allow his company to raise retail prices when input costs increase by 5-10%, authorities have delayed approving a hike.

“Prices determine the survival of businesses. Only when prices are timely adjusted can businesses survive,” he told a conference Friday.

Satra, another member of the city’s price stabilizing program, said that there were times input costs surged 20-40% this year but the company could only make changes within a 5% band.

Officials in HCMC and other southern localities like Dong Thap, Dong Nai and Binh Duong are reporting a decline in the number of companies participating in the price stabilizing program.

In HCMC there are now 60 such businesses even though the program was initiated 20 years ago. Their main products are food, milk and school supplies.

They are required to sell products with prices 5-10% lower than market rates and can only raise prices, with official approval, when input costs rise 5%.

At first, these businesses were given funding or loans with zero interests to kickstart operations and store large quantities of products to ensure prices are stabilized.

However, businesses say that recently they no longer receive these incentives and are having difficulties with loans as interests rise.

These companies proposed Friday that the city provide more incentives in loan interests and funding, while expanding storage and farming areas.

Bui Ta Hoang Vu, director of HCMC Industry and Trade Department, said that the city is working on solutions to support businesses in this and next year with priorities given to increase their capital and providing incentive interests.

The consumer price index increased 3.32% in Q3. The index is set to rise 4.5% against the 2022 target of 4%.