Vietnam to safeguard MSG as domestic producers hurt by imports

Vietnam has decided to safeguard MSG in order to protect its local market.

The Ministry of Industry and Trade has actioned a protective measure against monosodium glutamate (MSG) imports, the Vietnam Competition Authority (VCA) said on Monday.

The action is intended to protect the local industry from an increase in imports which threaten to cause serious damage to the local market, and so from March 25 foreign shipments will be temporarily restricted.  

The goal is to prevent foreign MSG manufacturers from hurting the local industry and “to create chances for domestic MSG producers to recover from the injury caused by the rapid increase of imports,” the VCA said on its website.

Beginning on March 25, an initial import duty of VND4.4 million (US$197.38) per metric ton will be applied to any imports of the flavor enhancer.

The tax rate will be gradually lowered, and by March 25, 2020, cut to zero unless the safeguard measure is extended.

In June 2015, Vedan (Vietnam) Enterprise Co. Ltd., a producer, requested an investigation into MSG imports.

Vedan said in a complaint filed to the trade industry that Vietnam’s MSG market was dominated by imported products, posing serious threat to domestic producers.

Seventy-six percent of imports were from China, followed by Thailand and India, at 13 percent and 11 percent respectively, Vedan said, citing 2014 statistics.

In 2014, the consumption of domestically produced MSG slid to 69 percent, down from 91 percent in 2012, while imports of MSG rose to 31 percent, up from only nine percent in 2012.

At the same time, Chinese MSG fetched only 47 percent of the average retail price of Vedan, leading to an unhealthy market condition, the producer said.

MSG is one of four commodities, alongside steel billets and bars, float glass, and cooking oil, to be investigated since 2009.

Vietnam is also set to temporarily safeguard steel billets and long steel against imports between March 22 and October 7, according to a decision signed by the Ministry of Industry and Trade on March 7.

Cooking oil has similarly been subject to an import duty of five percent since May 8, 2015 until May 7, 2016, and then two percent from May 8, 2016 to May 7, 2017.

No action has been taken following a probe into imports of float glass.

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