VCCA issues summary report on economic concentration activities in Vietnam's real estate sector in 2021
Real estate is one of the sectors with the most merger control notifications in 2021. The VCCA reported that 14 merger control notifications related to the real estate sector (including residential and non-residential real estate transactions) were reviewed. In spite of the concerns over the 4th wave of Covid-19 in Vietnam, M&A activities in the real estate sector in 2021 remained vigorous. In 2020-2021, the total scale of real estate transactions in Vietnam increased significantly (an increase of over 800 hectares over the previous year).
M&A activities in the real estate sector is expected to continue to be very active. Given the significant impact of the real estate sector on the economy, the VCCA is expected to closely monitor and continue to actively provide support and guidance businesses and in particular those in the real estate businesses on compliance with the Competition Law.
VCCA releases competition report on the auto manufacturing industry
The report, which was issued on 12 December 2021, focuses on the competition conditions in the auto manufacturing industry in Vietnam during the period from 2014 to 2019. The report identifies three segments of the auto manufacturing industry: manufacture of automobiles with less than nine seats, manufacture of coaches/buses, and manufacture of trucks.
With regards to competition in the segment of automobiles with less than nine seats manufacturing, the report states that there are few enterprises with sufficient capacity to compete in this market, given the high barriers to market entry and the large amount investment capital required to compete. Additionally, many manufacturers had reduced production activities due to the impact of tax and other implications under free trade agreements. Accordingly, with the current high level of concentration, it is easy for market players to engage in anti-competitive behaviors.
With regards to competition in the segment of coaches/buses manufacturing, the report states that there are not many companies participating in this segment and that market share is mainly concentrated in a few enterprises. The concentration ratio (CR) and Herfindahl-Hirsschman Index (HHI) in this segment from 2014 to 2019 exceeded 1,800. According to the VCCA, this indicates that the concentration level within this segment is very high. It considered that the possibility of anti-competitive behaviours taking place is also very high; and that the likelihood of new enterprises entering the market is very low.
With regards to competition in the market of trucks manufacturing, the report also states that this segment is highly concentrated with very few participants. The CR index and the HHI index from 2014 to 2019 were above 2,500, indicating high market concentration.
VCCA releases competition report on the pork industry
On 27 December 2021 the VCCA, again in cooperation with JICA, reported on the competition conditions in the fields of trading, distribution, supply and wholesale and retail of pork products in Vietnam.
During late 2019 and the first half of 2020, the pork industry in Vietnam experienced unusual price fluctuations affecting domestic consumers. Accordingly, the VCCA and the JICA conducted a study and prepared this report to continue to review and monitor the pork production and trading segment. The following points were highlighted in the report:
- During late 2019 and the first half of 2020, the price of pork products increased sharply by 100% - 150% compared to the same period in previous years.
- In 2018 - 2020, the volume and import and export turnover of pork products did not fluctuate to any notable extent. The only noticeable fluctuation came at the end of 2020 when volume and turnover increased after the African Swine Fever subsided.
- The main distribution and consumption channel of pork products is in traditional markets (nearly 80%), especially in areas rural areas. Distribution and consumption of pork products supermarkets and chain stores account for less than 15% in Vietnam.
- There is a large number of slaughterhouses in Vietnam. In terms of market share, no enterprise or organization has a dominant position in this segment, where the enterprise with the largest number of slaughterhouses having only 7% share.
- The report indicates that the level of market concentration in the port import segment is low during the period of 2018 to 2020, with only one enterprise having a 30% market share in 2020 based on import turnover.
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