Local apparel suppliers object to Central Group’s disrupted purchase
Local apparel suppliers object to Central Group’s disrupted purchase
Hundreds of laborers and their apparel firms today, July 3, gathered at the HCMC-based representative office of Central Group to oppose the group’s suspended purchases of Vietnamese textiles and garments.
On July 2, a letter allegedly sent from Central Group in Thailand to its partners in Vietnam stated that the Big C supermarket chain owned by the group will suspend purchases of apparel from Vietnamese suppliers from this month.
Central Group, in the letter, attributed the decision to its goal to restructure the group’s apparel business operations in the Vietnamese market.
The group will also stop placing orders based on commercial cooperation agreements between Central Group Vietnam and its partners until a new announcement is issued, according to the letter. All outstanding issues that arose prior to July 2 will be settled in line with the agreements.
“In order to prepare for our project of restructuring soft-line department in Vietnam, Central Group Vietnam has decided to suspend all purchasing activities regarding soft-line products from all soft-line suppliers in Vietnam, effective from July 2019.
"Therefore, we would like to send this letter to inform you about the temporary suspension of making order regarding your products in accordance with the Commercial Cooperation Agreement between your company and Central Group Vietnam, effective from July 2019 until further notice. All outstanding issues occurred before July 2, 2019 shall be settled in accordance with the Commercial Cooperation Agreement,” reads the letter.
Accordingly, the Big C supermarket chain announced the suspension last night, explaining that the suspension resulted from Central Group’s restructuring plan and changes in strategies for the development of its apparel department.
On July 3, Big C supermarkets returned all apparel products manufactured by Vietnamese firms.
In response to the letter and the suspension, hundreds of laborers and owners of textile and garment firms unfurled banners at the group’s representative office in HCMC to protest the move.
A representative of Central Group told VnEconomy that the group will soon issue a press release to explain the issue in detail.
Some experts voiced concern that if the plan is passed, a host of other Vietnamese products sold in supermarkets owned by foreign firms may be removed to make room for imported foreign items.
Thailand’s retail conglomerate Central Group rose to prominence in Vietnam following its acquisition of the Big C supermarket chain in 2016 at a cost of US$1.05 billion. In addition, the group holds a large stake in the Nguyen Kim electronics store chain and has established many retail stores nationwide.
As a member of Central Group, Central Group Vietnam operates a multiservice retail model, including 250 commercial centers and stores nationwide, two online retail channels and a number of Robins shopping centers and SuperSports sporting goods stores.
