VietNamNet Bridge – In order to obtain the room at supermarkets to display products, manufacturers have to follow complicated procedures and pay different kinds of fees.
The big power of supermarkets
The director of a fast moving consumer goods brand said in order to be able to put products on the supermarkets’ shelves, enterprises have to follow very complicated procedures.
“At first, you need to send email to supermarkets to introduce your company and your products. And you need to be patient enough to wait for the replies,” he said.
In general, according to the director, it takes several months to follow all the procedures, while it takes at least one year to obtain the goods registration certificate. Food and imports manufacturers and suppliers have to show the certificates on the products’ quality granted by the Ministry of Health, the customs declaration documents and the goods origin certificates.
“Even when supermarkets agree to grant codes to your products, this does not mean that the products would be put on the supermarkets’ shelves,” he said.
“The products would be displayed somewhere, and they would be on the shelves when the supermarkets find them salable,” he explained.
The best positions at supermarkets have always been occupied by foreign invested enterprises or joint ventures, which have bigger budgets for advertisements, and products more salable.
According to Lam Huong, Director of Hoang Huong Company, supermarkets have “big power and relations.” The products with supermarkets’ private brands are put in the positions which easily catch the consumers’ eyes. Meanwhile, domestic enterprises’ products are displayed in the positions hidden from view.
Previously, SG Food’s products were put in disadvantageous positions. However, since the day it accepted to make products for supermarkets, the company’s products have been put in advantageous positions.
In many cases, the “life expectancy” of the products at supermarkets is very short--about three months, and then they are removed from the supermarkets’ shelves. It is because too many enterprises queue up to enter supermarkets, while the display area at supermarkets is limited.
Therefore, supermarkets usually carry out the “purge campaigns,” removing from the shelves the products with low sales or the products of the companies which rarely organize sale promotion programs.
The representative of a food manufacturing enterprise complained that the enterprise’s products could exist at a supermarket for four months, even though the sales were relatively good and the products have big potentials.
“I have heard that the supermarkets compared the sales of the products and they only retain the products which have the best sales, while they don’t care about the potentials,” he said.
Ngo Trung Quan, Director of Dai Viet Huong Company, said it is understandable why supermarkets have to exclude products from their distribution chains.
“The display area is limited, while the volume of goods is too big,” he said. Big brands don’t have to pay fees to get the room at supermarkets, because retailers would be willing to display the products to ensure their turnover.
Analysts said if the State wants supermarkets to display diversified products so as to ensure the benefits of the whole society, it needs to issue legal documents on the issue.