Seminar discusses decree on monopolistic on beer, alcohol and beverage sector

It requires enterprises and groups with total assets in Viet Nam of VND2 trillion (US$85.45 million) or revenues of at least VND2 trillion to notify the authority prior to mergers & acquisitions or purchase of stakes in other entities.

Entities entering into M&A deals worth VND1 trillion must also notify the agency as should a company that acquires another and their combined market share was at least 20 per cent of the market in the preceding financial year, delegates heard in a seminar in HCM City on Monday.

Tran Phuong Lan, head of the authority’s economic concentration control department, said these are among regulations in the decree that would take effect on July 1.

The 2004 Law on Competition uses only a single criterion for the relevant market threshold to control monopolistic activities. It prohibits economic concentrations where the market share exceeds 50 per cent. Enterprises which have 30-50 per cent of the market share must notify the agency prior to carrying out any acquisition.

Lan admitted it is difficult for enterprises to calculate their market share when they do not know the market size. Therefore, the amendments to the law introduces more criteria like assets, revenues and deal values, she said.

This will make it easier for enterprises to understand when they need to notify the authorities, she said.

Tran Phuong Nhung, deputy head of the authority’s economic concentration control department, said there were 40 notifications for anti-trust cases in 2005-18, with the manufacturing sector, including the alcoholic beverages sector, accounting for the highest number.

Some large enterprises in the beer, alcohol and beverage market have revenues and total assets exceeding the threshold stipulated in the decree.

After receiving notification from a company proposing to make an acquisition, the Vietnam Competition Authority will announce its decision on whether the deal is permissible within 30 days.

Nguyen Ngoc Son, vice president of Ton Duc Thang University, said the Competition Law has a number of progressive provisions in line with international best practices.

It would help enterprises easily identify the control level they can acquire, he said.

Delegates at the seminar said the thresholds for monopoly are low.

Le Quang Lan, deputy director of the Competition and Consumer Protection Authority, said the figures related to monopoly are not comprehensive, and authorities would tweak them if necessary.

This draft decree has been submitted to the Government.