VietNamNet Bridge – Enterprises now have the right to determine how much they will spend on ads and marketing activities, but do not have the right to determine the discount rates during promotions.

The first Black Friday in Vietnam, slated for December 5, was hoped to give a push to the development of e-commerce in Vietnam. However, Vietnamese consumers were warned that they should not expect too much on the day, because under the current regulations, the selling prices of goods and services during promotions must not be lower than 50 percent of the price prior to the sale.

Thus, there was a cap on the discount rates manufacturers and distributors could offer, and big sales like “buy 1 and get 1 free” would be illegal.

This means that if a customer buys a glass of beer at VND20,000, he can expect no more than a half glass of beer more for free. The owner of the beer shop will be fined if he offers more than allowed.

In fact, many sales promotion campaigns with discounts of up to 80-90 percent continue to be run by some companies, and the information about the excessive discount rates can be seen in print newspapers, the internet and banners hung over main streets in big cities. The ads can exist because the watchdog agencies have closed their eyes to them.

However, only small businesses can escape the watchdog agencies’ eyes, while big businesses cannot. Telecommunication groups, for example, in the past ran many sale promotion campaigns under which they gave 100 percent, or 150 percent of the value of the scratch cards, to mobile phone subscribers. However, they had to stop the programs after getting warnings from the Ministry of Information and Communication.

A lawyer commented that the regulation reflected excessive intrusion of the state in business operations.

The lawyer also pointed out that while the regulation on the ceiling of the businesses’ expenses on advertising and marketing activities has been lifted by the National Assembly (when it ratified the tax laws in late November), the outdated regulation on the ceiling promotion level still exists.

“Businesses must have the right to determine their selling policy,” the lawyer said. “Only businesses know what they should do to optimize their production and business effective.”

Therefore, he has called for urgent amendment of Decree 37 which contains the outdated regulation.

He went on to say that it would not take much time to add the amendment, because there is no need to put the issue to discussion at National Assembly’s sessions. The Commerce Law stipulates that this is within the jurisdiction of the government.

TBKTSG