VietNamNet Bridge – Vietnamese suppliers are worried about their future contracts with Metro Cash & Carry, which has been bought by the Thai company Berli Jucker.

The suppliers who have been Metro’s loyal partners are looking forward to hearing information abou BJC’s new policies.

The director of a consumer goods manufacturing company, which has been supplying goods to Metro for the many years, said he heard about the new owner on August 14.

The director, like many other suppliers, said he began to worry about his relationship after hearing about the change of ownership of the wholesale distribution chain.

“I am afraid that BJC would follow a new business strategy, under which our products would not have opportunities in the distribution chain,” he said.

He said that his company actually makes a low profit when selling products through the Metro chain because the distributor always asks for high discount rates.

Suppliers sign contracts with Metro on supplying goods to the distribution chain. The discount rates are discussed and fixed once every year.

In most cases, Metro requires higher discount rates year after year, which leads to lower profits for the manufacturers.

However, the suppliers still want to sell their products through Metro because it is a well-known distribution brand that can help introduce their goods to the general market.

The director said he fears that the new investor will focus on distributing Thai products, while reducing the proportion of Vietnamese goods displayed by the supermarket chain.

He is eager to know about the new policy to be pursued by the Thai investor so as to draw up his business plan.

“If BJC prioritizes to distribute Thai products as some analysts have predicted, we will have to cooperate with other distributors,” he said.

Meanwhile, another businessman, specializing in providing kitchenware products, said he thinks the situation would “not be too bad”.

“Even if BJC focuses on distributing Thai products, it will not weed out Vietnamese goods out of its distribution chain,” the businessman said. “BJC, as a retailer, would have to sell products needed by Vietnamese consumers, not the products they want to sell.”

Like the consumer goods manufacturer, the businessman said the sales through Metro just account for a small percentage of his company’s total revenue.

However, he hopes the situation would improve one day when the distributor expands its network.

Analysts commented that in fact, the flooding of Thai and ASEAN goods in the Vietnamese market is foreseeable, as Vietnam has committed to open its market fully to ASEAN countries by 2015.

This means that even if BJC did not buy Metro, Vietnamese products would also have to compete with Thai products in the home market.

However, analysts say Thai goods are more expensive than Vietnamese items because of the transport fees. Thus, Vietnamese goods would still maintain their advantages over imports.

TBKTSG