Over the past few years Vietnam has suffered several bouts of rampant inflation. Some products have been harder hit than others, namely milk products and other consumables. Understandably, rapid price increases on consumer staples are quite unpopular.
The Vietnam authorities have decided to try to control prices by fiat. Recently, they issued something called "Circular 122." Not only is it unclear, but it contains different treatment for state-owned and private-sector companies. It also mandates disclosure to state authorities of confidential pricing information despite an unsettling history of similar disclosures finding their way into the press.
In short, it's a step backward for Vietnam's economic development.
Countless experiences in other markets have shown again and again that price controls have the opposite of the desired effect. They increase burdens and lower revenue on the companies providing valuable goods and services, which ultimately cause those companies to reduce their output or get out of the business entirely.
The best cure for rising prices is encouraging unfettered and free competition. My unsolicited advice for the authorities is to eliminate burdensome red tape and generally make it easier for companies to do business and create wealth for the benefit of Vietnamese society.
You can read a summary of Circular 122 here. Read the full text of the European Chamber of Commerce's open letter to the Ministry of Finance here. For a little background on price controls, click here.