Over 90 percent of vendors at the largest garment market in Ho Chi Minh City have applied to cease operating in protest at plans to double rent.
As many as 138 of 150 vendors in Dai Quang Minh Market have petitioned authorities of Ward 14 in District 5, seeking their intervention after market operator Satraseco announced its intention to increase rent in this and next year.
The company in the end of March told market vendors it would increase rent per stall by 50 percent to 130 percent by the end of this year and early next year.
It also required vendors to put down a three-month deposit, and will take back the stalls of those who fail to fulfill these requirements.
The vendors, whose names have been changed in this report to protect their identity, disagreed with the requirements, as many have been working here for decades and never experienced such a surge in rent.
Huong, who has been selling at the market for 32 years, said she had only seen rent increase by 10 percent to 30 percent in previous years.
“I can accept an increase every once in a few years. In the two years of Covid-19, we were still paying rent despite business closure, but now they want an increase when we haven’t recovered.”
Huong’s stall, which covers three square meters, cost VND3 million ($129.37) a month before, but starting June 1, will cost VND6 million.
By next year, she will have to pay VND8 million, or 2.6 times the rent earlier this year.
This rent will be higher than her revenue if taxes are included.
Another vendor, Thanh, is set to see rent on his eight-square-meter stall increase by 124 percent by early next year to VND13.6 million a month.
Hang, who has been selling at the market for over 30 years, said the operator should have obtained vendor agreement before increasing the rent since she and many other vendors had contributed to the construction of the establishment decades ago with gold.
Vendors said that in the early 1990s, some of them had contributed more than 10 taels of gold (or more than 375 grams) so they could have a four-square-meter stall.
In 2005, they contributed another VND100 million each to help improve market infrastructure.
Vendors, however, have been complaining about the lack of improvement in infrastructure, as there is only one restroom for 150 vendors, while the walls leak.
They want Satraseco to scrap the requirement to pay a deposit, calling it an “appropriation” of their funds.
They also want the operator to seek vendor agreement when increasing rent and to extend their contracts to a two-year tenure instead of the current six months.
Pham The Hanh, CEO of Satraseco, told VnExpress the company decided to increase the rent based on the location and prospects of the market.
Dai Quang Minh requires very low rents and such increases are appropriate with market prices, he added.
To avoid a surge in rent, the company has decided to pump it up on two occasions, in the last six months of this year and in the first six months of next year, Hanh said.
The rent increase will in turn benefit vendors as Satrasecowill use the increased revenue to improve market infrastructure, he added.
Hanh said that after the announcement, the company had invited each vendor to a private meeting, but some did not show up or showed unwillingness to meet, instead seeking a public meeting with all vendors present.
The CEO said that the three-month deposit requirement is upheld by the law and has been part of the contract since 2017, but until now, only 17 vendors have put down a deposit.
The People’s Committee of Ward 14 last month proposed the company push its rent increases to early next year, as businesses are recovering from Covid-19 impacts.
Vo Thanh Toi, chairman of the ward, said that his office had invited both parties to a meeting two or three times since March, but it cannot intervene in their discussion as this is a civil contract between a company and each vendor.
On May 30, Satraseco sent another letter to vendors explaining the reason for the rent increases, and affirmed that it would liquidate the contracts and take back the stall from vendors who fail to comply.
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