Ho Chi Minh City-based grocery chain Bach Hoa Xanh has been selling made-in-China mushrooms in the guise of quality local goods bearing Vietnamese Good Agricultural Practices (VietGAP) tags, according to an investigation by Tuoi Tre (Youth) newspaper.
Investigative journalists from Tuoi Tre found that Dong A Trading and Production JSC, based in Linh Dong Ward, Thu Duc City, a district-level unit under Ho Chi Minh City, had been allegedly providing mislabeled products to Bach Hoa Xanh.
In order to bear the VietGap label, fruits and vegetables must be grown using methods that ensure the safety and cleanliness of the products.
In a statement sent to Tuoi Tre on Wednesday, Bach Hoa Xanh said it immediately ceased the sale of all products supplied by Dong A and asked the company to check the quality, origin, and supply process of its products.
The grocery chain also issued an apology to customers.
“Bach Hoa Xanh’s aim is to comply with regulations on the product traceability and ensure clear origins for its products,” the chain said.
“In this case, Bach Hoa Xanh understands the importance of better controlling the origin and quality of commodities.
|Vegetables are imported from China to Hoc Mon wholesale market in Ho Chi Minh City. Photo: Bong Mai / Tuoi Tre|
“Bach Hoa Xanh purchased only mushrooms from Dong A. On June 8, 2022, we signed a contract with Dong A to use their products for up to three percent of the mushrooms sold in our stores.
“After this case, Bach Hoa Xanh will work with all of our other suppliers to better control our product sources.”
Bach Hoa Xanh claims the most important criteria it evaluates when purchasing products are quality, hygiene, and safety.
Imports sold in its stores also meet Vietnam’s requirements, including having their origins and quality verified by and registered with relevant agencies.
Fake and smuggled goods are prohibited from hitting the shelves.
Bach Hoa Xanh claims its current policy is not to compromise with suppliers who skirt these regulations.
Violations come to light
With an abundant supply and prices as low as half of what Vietnamese products sell for, masquerading Chinese produce as ‘grown-in-Vietnam’ is becoming commonplace at supermarkets and convenience stores looking to improve their bottom lines.
Last month, Tuoi Tre reporters went undercover as Dong A Company workers and discovered that the issue of fraudulent produce stretches beyond the produce sold at a single grocery store chain.
During their investigation, the undercover reporters noticed a small mushroom processing room at the Dong A facility that had been sectioned off from the primary vegetable processing area.
Inside the room, workers were replacing packing branded by a company named ‘Ready Food’ with new labels and tags that included the words ‘fresh’ and other Dong A insignia.
These ‘new’ 300-gram trays of sundry, oyster, king oyster, and enoki were filled with produce that had been sourced from China and given ‘fresh from farm to table’ stickers together with a VietGap logo issued by the Vietnamese Ministry of Agriculture of Rural Development.
Elsewhere in the mushroom processing room, 125-gram bags of white linhzhi mushrooms labeled as ‘made in China’ that had been imported and distributed by Loi Hao Gia Co. Ltd. were repackaged into new 150-gram trays, renamed as ‘beech mushrooms’ and given stickers claiming the products were ‘Fresh Vegetables’ and ‘fresh from farm to table.’
Any traces of these products’ Chinese origins were removed.
The fact that these mushrooms had all originated in China was corroborated by a veteran Dong A worker.
Another Dong A worker told the Tuoi Tre reporters that these relabeled and repackaged mushrooms were to be delivered to Bach Hoa Xanh grocery stores.
Sure enough, while the reporters were still on-site at the Dong A facility, a green truck bearing the Bach Hoa Xanh label pulled up to the loading dock where workers wearing shirts that read ‘Toan Tin (Fully Trusted) Logistics’ began loading the truck with mushrooms.
Fully Trusted Logistics JSC is an arm of Mobile World Investment Corporation, the operator of Bach Hoa Xanh.
|Workers replace the packaging of Chinese seafood mushrooms with plastic bags featuring a Dong A Trading and Production JSC logo. Photo: Bong Mai / Tuoi Tre|
Dong A claims a pillar of its mission is ‘Spreading Dong A’s spirit – connecting the community, and being an important part in the supply chain of agricultural products in Vietnam to increase the value of and ensure the sustainable development of Vietnamese agricultural products.’
The reporters followed the truck to Bach Hoa Xanh’s central warehouse on Tran Dai Nghia Street in Binh Chanh District, Ho Chi Minh City, where the Dong A-branded mushrooms were unloaded.
An employee at the warehouse said the products were destined for Bach Hoa Xanh’s retail stores.
As part of their investigation, the Tuoi Tre reporters visited a mushroom stall run by Loi Hao Gia in Thu Duc wholesale market.
Gia’s stall specializes in enoki, seafood, king oyster, brown and white lingzhi, and fresh shiitake mushrooms.
According to staff, all of these mushrooms had been imported from China.
“Only the [food suppliers’] packaging is theirs. They buy our mushrooms and replace the packaging and labels to make them their own,” one staff member claimed.
Consequences an afterthought
Ho Chi Minh City’s Thu Duc and Hoc Mon wholesale markets have recently seen a huge inflow of vegetables from both China and from across Vietnam.
These products include napa cabbages, cabbages, onions, carrots, and turnips, and most seem to have had their stamps and labels tampered with.
At Thu Duc wholesale market, relabeling is so rampant that stall owners occasionally remove and replace Chinese labeling in plain sight.
According to H., a trader at Thu Duc wholesale market, the wholesale price for Chinese onions is just VND15,000 (US$0.63) per kilogram compared to nearly double for onions grown in Da Lat, a greens hub of Vietnam.
In addition to their lower prices, Chinese onions can also be stored for up to two weeks. Da Lat onions, on the other hand, have a shelf life of about five days.
“Only three to four percent of traders choose Da Lat greens. Most mainly sell [China-originated] produce,” H. shared, pointing out that Chinse cabbages, for example, are bigger and have better coloring.
H. also noted that Chinese and Da Lat cabbages both sell for about VND15,000 per kilogram but consumers prefer the Chinese because of their longer shelf life – six days versus three days.
|After taking mushrooms from Dong A Trading and Production JSC, a Bach Hoa Xanh truck transports the products to the grocery chain’s central warehouse in Binh Chanh District, Ho Chi Minh City. Photo: Q.B. / Tuoi Tre|
Linh, a vendor at Hoc Mon wholesale market, noted that the packaging for the carrots, potatoes, onions, and fruits sold at the market all displays Chinese labeling, but when they are distributed to wet markets unpackaged, sellers there can easily dupe customers into believing they were cultivated elsewhere.
“Vietnamese people don’t like poor-quality Chinese agricultural products, so most sellers say their products were farmed in Da Lat, the U.S., or Japan,” Linh said.
“This also lets them sell their produce for double or triple the price.”
Chinese agricultural products overwhelm Vietnamese market
According to Thu Duc wholesale market representatives, about 550 metric tons of Chinese goods are brought into the market each night.
Many of these products, such as potatoes, carrots, napa cabbages, garlic, grapes, and pears, are sold at the market throughout the entire year.
Their prices are also considerably cheaper than their counterparts grown in other countries.
Chinese apples, for example, cost VND35,000 ($1.5) per kilogram while U.S. gala apples sell for VND75,000 ($3.2) per kilogram.
In addition, Chinese and Korean pears are sold at VND35,000 and VND65,000 ($2.8) per kilogram, respectively.
Another case in point is garlic, which fetches VND25,000 ($1.1) per kilogram if grown in China but VND300,000 ($12.7) per kilogram if planted on Vietnam’s Ly Son Island.
The price of Da Lat pink potatoes is double that of Chinese yellow potatoes, at VND28,000 ($1.2) and VND14,000 ($0.59) per kilogram, respectively.
While the supply of many local goods, such as Vinh Chau red onions, Da Lat white onions and carrots, and Hanoi cauliflowers, fails to meet demand, Chinese products are abundant and fetch low prices.
Chinese red onions cost just VND25,000 ($1.1), Chinese white onions and carrots VND15,000, and Chinese cauliflowers VND35,000.
As per Decree 43/2017/ND-CP, organizations and individuals must take responsibility for labelling products, including secondary labels, in an honest, clear, and accurate manner which shows the nature of the products, according to a Ho Chi Minh City lawyer.
Imported goods with improper labels may feature secondary labeling but the original tags need to remain intact on the packaging.
An Cuong Wood to list neary 134 mln shares on HOSE
An Cuong Wood-Working, which holds 55% of the market for decorative materials and industrial wood, announced the first six month revenue of VND1,915 billion ($80 million), up 12% and a 17.4% increase in after-tax profit to VND279 billion ($11.7 million).
Since this firm enjoys the benefit of name and brand recognition in the industry, leadership claimed that they are not particularly interested in the low-end category.
With an aim of building 30 more showrooms between 2022 and 2025, the Vietnamese enterprise An Cuong Wood already operates almost 30 showrooms around the country, mostly in Hanoi, Da Nang, and Ho Chi Minh City.
Builders, construction units, and agents account for 69% of the income generated by customers, followed by export customers (15%), consumer customers (5%), and real estate developers like Vingroup (11%). As of June 30, there were 2,962 persons working for the entire firm.
To enhance capacity, the firm is marketing the export market. With a concentration on the US, An Cuong Wood has exported goods to 15 nations.
By 2025, it’s anticipated that exports would account for 15–18% of overall income. The firm aspires to generate $300 million in sales by 2025 through a strategy of consistently growing its product line and finding new markets.
The profit after tax for An Cuong Wood- Working is VND947 billion ($40 million). The business continues to invest an additional VND393 billion ($16.5 million) in the first half of 2022 to acquire 30% of Central Hill Real Estate Company.
The leadership determined that the goal of VND550 billion ($23 million) in profit was realistic and anticipated that it will be exceeded by 10% to 20%. This will be the wood industry’s finest outcome ever.
Vietnamese dong ranked among currencies with lowest depreciation: SBV
Among the countries in the region and worldwide grappling with currency depreciation, the Vietnamese dong is listed in a group with the smallest devaluation, Pham Chi Quang, deputy director of the Monetary Policy Department under the State Bank of Vietnam, told a press briefing late last week.
In the year to date, the dong dropped by nearly 4 percent against the U.S. dollar, much lower than other currencies, said Quang.
After the U.S. Federal Reserve (Fed) hiked interest rates by 75 basis points on September 21, many nations followed suit.
In the past nine months, the Taiwanese dollar, the Japanese yen, the Philippine peso and the euro have lost 13.5 percent, 25 percent, 13.65 percent and 13.49 percent, respectively, against the greenback.
“The Vietnamese dong is one of the currencies reporting the lowest depreciation in the region and the world, at some 4 percent,” Quang stressed.
After the Fed’s move, a number of the central banks of many nations such as Thailand, Norway and Indonesia raised key interest rates to tame inflation.
Dao Minh Tu, deputy governor of the State Bank of Vietnam, said that many countries’ rate hikes are expected to take a toll on Vietnam’s foreign exchange rates.
Following the Fed’s rate spike, the central bank decided to set new interest rate caps on deposits.
The highest rate for savings from one month to fewer than six months is 5 percent per year, up 1 percentage point, taking effect from September 23.
“The central bank will continue to control its currency in a flexible and appropriate manner to stabilize foreign exchange rates and ensure a reasonable and legal supply of foreign currencies for firms and residents,” Tu affirmed.
The central bank’s top mission for the control over monetary policy is curbing inflation and stabilizing the economy, Tu added.
Besides, the banking system will focus on supporting enterprises with their post-COVID-19 recovery, contributing to reaching the full-year target of the country’s economic growth at 6.5 percent set by the National Assembly.
To ease fears over a spike in lending rates after the deposit rate cap hikes, the central bank will continue to maintain interest rate stability, said the representative of the central bank.
Tu also added that lending rates will follow the move of domestic and foreign inflation in a suitable way.
Further, the central bank will continue to encourage credit institutions to cut operating costs to lower lending rates for the government’s priorities, including small and medium enterprises and firms active in agriculture.
“We called on commercial banks for a cost-cutting plan to slash lending rates to share difficulties with customers. This has been implemented well over the past two years, with VND25 trillion ($1.05 billion) in lending rate reduction,” said Tu.
The credit growth target will be kept at 14 percent this year. In the year to date, the nation’s credit has jumped by over 10 percent.
Trade ministry aims to bring Vietnam Rice trademark into high-end markets
Vietnam’s Ministry of Industry and Trade is drafting a strategy to increase the country’s direct rice export rate and boost the sale of the Vietnam Rice national brand to high-end markets by 2030.
The trade ministry is making a draft strategy to develop Vietnam’s rice export until 2030, which highlights many solutions for boosting demand through negotiations, entering new markets, and increasing exports with a tariff reduction road map.
By 2025, the proportion of low- and medium-grade white rice will have accounted for no more than 15 percent of the country’s rice exports, while high-grade and fragrant rice, japonica rice, and specialty rice will constitute 40 percent.
Rice with high added value such as nutritious rice, parboiled rice, organic rice, and processed products will make up five percent.
By 2030, the direct export of rice will have generated 60 percent of the country’s rice export turnover, while products under the Vietnam Rice trademark will account for 25 percent.
To realize these goals, Vietnam needs to implement policies related to agricultural land, attract investment, promote mechanization and high technology in production, develop more rice varieties, and effectively use the Vietnam Rice trademark, the trade ministry stated.
Certain requirements in production and processing should be established to make sure that the quality of rice meets standards of the country as well as of demanding markets such as the European Union.
The development strategy also focuses on restructuring the rice industry and agricultural production, as well as providing solutions for the production and control of pesticide residues toward the implementation of clean agricultural production.
In addition, the country will tighten the management of imported rice via non-tariff measures and technical barriers.
Vietnam has grown and exported rice for many years, Nguyen Thanh Phuoc, head of the Sub-Department of Cultivation and Plant Protection in the Mekong Delta province of Soc Trang, stated, adding that it is a pity that no rice brand has become the national trademark.
The rice cultivation skills of local farmers have improved, and it is not difficult to produce high-quality rice varieties, Phuoc continued.
In order to have large output and stable quality, export businesses need to cooperate closely with farmers, the official proposed.
Farmers and businesses must play the central roles in boosting the exports of products under the Vietnam Rice brand, said Vo Cong Thuc, head of the food quality management department of Loc Troi Group, a manufacturer and supplier of agricultural products and services.
After noticing the positive signals from the European market, Loc Troi Group has boosted its investment into local farmers to ensure the interests of both sides.
If farmers do not comply with European rice export standards, businesses will suffer losses as they fail to provide high-quality products for their partners.
Farmers’ compliance with international standards of farmers is decisive in producing high-quality rice grains and increasing the value of Vietnam’s rice export in the global market, Thuc remarked.
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