Quyết định 2332/QD-BCT

DECISION

APPROVING THE “TOBACCO PRODUCT WHOLESALING NETWORK PLANNING NATIONWIDE BY 2020, AND THE ORIENTATION TOWARDS 2025”

THE MINISTER OF INDUSTRY AND TRADE

Pursuant to the Government's Decree No. 95/2012/ND-CP dated November 12^th 2012, defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;

Pursuant to the Government's Decree No. 92/2006/ND-CP dated September 07^th 2006 and the Government's Decree No. 04/2008/ND-CP dated January 11^th 2008 on the amendments to the Government's Decree No. 92/2006/ND-CP on the establishment, approval, and management of the socio-economic development planning;

Pursuant to the Circular No. 17/2010/TT-BCT dated May 05^th 2010 of the Minister of Industry and Trade on the contents, order and procedure for formulating and approving trade development planning;

The Decision No. 6318/QD-BCT dated December 01^st 2010 of the Minister of Industry and Trade, approving the outlines and estimates for the “Tobacco product wholesale network planning nationwide during 2010 – 2020, and the orientation towards 2025”;

At the request of the Director of the Department of Domestic market

DECIDES

Article 1. Approving the “Tobacco product wholesaling network planning nationwide by 2020, and the orientation towards 2025”. In particular:

I. VIEWPOINTS

1. The tobacco product wholesaling network planning is carried out on the principle that tobacco is restricted from trade and its use is not encouraged. The State strictly control the development and spread of tobacco product wholesaling network

2. The tobacco product wholesaling network planning is to ensure the systematic and synchronous tobacco product wholesaling from the production to the wholesaling and service provision.

3. Develop capable tobacco wholesalers that always satisfy conditions and regulations of the State on the trade in tobacco products.

II. TARGET

1. General targets

Step by step build up and rearrange the tobacco product wholesaling network towards a reasonable structure participated by all economic sectors in order to establish a system of professional tobacco product sellers capable of satisfying demands (including domestic and imported tobacco products) in each locality nationwide, raise the competitiveness in the market economy under the management of the State and international economic integration; limit spontaneous businesses and unlicensed businesses; control the product quality, prices, control and restrict cigarette smuggling; contribute to the prevention and suppression of tobacco harm and protection of consumers’ interests.

2. Specific targets

Rearrange the wholesalers in central-affiliated cities and provinces (hereinafter referred to as provinces) based on the existing tobacco product wholesaling network as follows:

a) By 2015

Maintain the existing network, including tobacco product wholesalers in at least 02 provinces licensed by the Ministry of Industry and Trade, tobacco product wholesalers within 01 province licensed by Services of Industry and Trade, and tobacco product retailers in districts, towns, and cities affiliated to provinces (hereinafter referred to as districts) licensed by Departments of Industry and Trade or Departments of Economics and Infrastructure (hereinafter referred to as Departments of Industry and Trades); prioritize the tobacco product wholesalers in localities with high demands; focus on improving the capability and facilities of tobacco product wholesalers in order to facilitate the establishment of the tobacco product wholesaling network of succeeding stages.

It is estimated that there are approximately 1,000 tobacco product wholesalers nationwide by 2015 (including 200 tobacco product wholesalers in at least 02 province, 800 tobacco product wholesalers in 01 province), 50% of which Is in the North, 24% of which is in the Middle and Tay Nguyen, and 26% of which is in the South.

b. 2016 - 2020

Establish the tobacco product sale network including tobacco product distributors (tobacco product sellers in at least 02 provinces, licensed by the Ministry of Industry and Trade), tobacco product wholesalers (tobacco product seller in 01 province, licensed by Services of Industry and Trade), and tobacco product retailers (tobacco product sellers within a district, licensed by Departments of Industry and Trade) by determining the number of tobacco product distributors, wholesalers, and retailers according to the population, financial capability, transportation capability, according to the storage system and the ability to break into the market of each seller to supply tobacco products to their customers.

It is estimated that there are approximately 350 tobacco product distributors, 1,760 tobacco product wholesalers nationwide by 2020 (45% of which is in the North, 27% of which is in the Middle and Tay Nguyen, and 28% of which is in the South).

An area of at least 123,000 m², 2,460 trucks capable of at least 500 kg, and 2,460 billion VND are needed during this period.

c. 2021 - 2025

Keep rearranging the tobacco product distributors, wholesalers, and retailers in the previous period to match the socio-economic development and management requirements in this period.

It is estimated that there are approximately 300 tobbaco product distributors, 1,500 tobacco product wholesalers in this period (40% of which is in the North, 30% of which is in the Middle and Tay Nguyen, and 30% of which is in the South).

III. TOBACCO PRODUCT WHOLESALING NETWORK

1. Bases for the planning

The tobacco product wholesaling network is established on the following bases:

a) Bases for selecting and controlling sellers:

Tobacco product sellers shall be selected in each province based on the population, area, distance, type of city, financial capacity, transport conditions, storage system, and their experience.

b) Bases for selecting tobacco product sellers:

- Bases for selecting tobacco product distributors:

+ The number of tobacco product distributors in at least 02 provinces depends on the country’s population: no more than 01 tobacco product distributor for every 250,000 people

+ Distributors must have warehouses (or warehouse system) under their ownership or co-ownership, according to the joint venture or contribution agreements or warehouse lease contracts, that match their scale (the area of at least 100 m²) and meet the demand for preserving the quality of tobacco products in storage.

+ Distributors must have vehicles under their ownership or co-ownership, according to the joint venture or contribution agreements or have vehicle lease contracts that match their scale (at least 02 vehicles capable of at least 500 kg) and meet the demand for preserving the quality of tobbaco products in transit.

+ The financial capacity is able to ensure the normal operation of the distribution system (a written certification of at least 02 billion VND in their account).

+ There is a tobacco product distribution system in at least 02 provinces (there are at least 02 sellers have sold tobacco products wholesale or are expected to become tobacco product wholesalers in each province).

+ Distributors must have experience and ability to break into the tobacco market (usually the sellers that have sold tobacco products or other consumables)

- Bases for selecting tobacco product wholesalers:

+ The number of tobbaco product wholesalers within 01 province depends on the country’s population: no more than 01 tobbaco product wholesaler for every 50,000 people

+ Wholesalers must have warehouses (or warehouse system) under their ownership or co-ownership according to the joint venture or contribution agreements, or have warehouse lease contracts that match their scale (the area of at least 50 m²) and meet the demand for preserving the quality of tobbaco products in storage.

+ Wholesalers must have vehicles under their ownership or co-ownership, according to the joint venture or contribution agreements or have vehicle lease contracts that match their scale (at least 01 vehicles capable of at least 500 kg) and meet the demand for preserving the quality of tobbaco products in transit.

+ The financial capacity is able to ensure the normal operation of the distribution system (a written certification of at least 01 billion VND in their account).

+ There is a tobacco wholesaling system in the province where there head office is situated (at least 02 tobacco retailers).

+ Wholesalers must have experience and ability to break into the tobacco market (usually the sellers that have sold tobbaco products or other consumables)

2. Tobacco product wholesaling network

a) By 2015

It is estimated that there are 1,000 tobacco product wholesalers nationwide by 2015 (including 200 tobacco product wholesalers in at least 02 province, 800 tobacco product wholesalers within 01 province), 50% of which is in the North, 24% of which is in the Middle and Tay Nguyen, and 26% of which is in the South.

b) 2016 - 2020

It is estimated that there are approximately 350 tobbaco product distributors, 1, 760 tobacco product wholesalers by 2020 (45% of which is in the North, 27% of which is in the Middle and Tay Nguyen, and 28% of which is in the South).

Warehouses, vehicles, and finance needed in this period:

- An area of at least 123,000 m² is needed in this period, including:

+ An area of at least 35,000 m² is needed by tobacco product distributors;

+ An area of at least 88,000 m² is needed by tobbaco product wholesalers;

- At least 2,460 vehicles capable of at least 500 kg are needed in this period, including:

+ At least 700 vehicles are needed by tobbaco product distributors;

+ Atleast 1,760 vehicles are needed by tobbaco product wholesalers;

- At least 2,460 billion VND is needed in this period, including:

+ 700 billion VND is needed by tobbaco product distributors;

+ 1,760 billion VND is needed by tobbaco product wholesalers;

c) 2021 - 2025

Rearrange the tobacco product distributors and wholesalers so that there are approximately 300 tobacco product distributors, 1,500 tobacco product wholesalers in this period (40% of which is in the North, 30% of which is in the Middle and Tay Nguyen, and 30% of which is in the South). In particular:

- Rearrange tobacco product distributors and tobacco product wholesalers according to the requests of suppliers, the demands of the market, and the tendency of consumers, and comply with the principles established in this period.

- Manage the tobacco product retailing system more strictly according to local planning.

IV. SOLUTIONS

1. The State shall:

a) Formulate and request the Government to promulgate a new Decree, providing guidance on the Law on Prevention and suppression of harmful effects of tobacco, to supersede the Government's Decree No. 119/2007/ND-CP dated July 18^th 2007 on the production and sale of tobacco; draft a new Circular to supersede the Circular No. 02/2011/TT-BCT dated January 28^th 2001 of the Ministry of Finance, providing guidance on the implementation of the Government's Decree No. 119/2007/ND-CP dated July 18^th 2007 on the production and sale of tobacco.

b) Enhance the inspection of the compliance of tobacco product sellers with business conditions and the laws on selling tobacco product in order to create a stable sale system to prevent smuggling and substandard products from circulating in the market.

c) Provide knowledge about current laws on selling tobacco product for tobacco product sellers and relevant authorities.

d) Boost the establishment and development of modern modalities of tobacco product selling. Improve the efficiency of tobacco product sellers established over this period.

2. Tobacco product manufacturers shall:

a) Formulate strategies for business and market development in conformity with the management requirements of the State. Survey the market and customers’ tendency to provide solutions for satisfying the demands of each market.

b) Develop and control the system of tobacco product sellers to from a stable tobacco product selling network.

3. Vietnam Tobacco Association (VTA) shall:

a) Cooperate with competent authorities in disseminating the laws on tobacco product selling.

b) Provide instructions and experience of developing and controlling the stable tobbaco product selling network for tobbaco product manufacturers and sellers.

V. IMPLEMENTATION

1. Responsibilities of the Ministry of Industry and Trade

The Ministry of Industry and Trade shall announce the planning and cooperate with relevant Ministries in providing guidance for Services of Industry and Trade on the implementation of this Decision, in particular:

a) Monitor and inspect the implementation of the Planning.

b) Provide guidance for provincial governments on reviewing, amending, or making new planning for local tobacco product retailing networks in conformity with this Planning and relevant laws.

c) Provide instruction and inspect the management of licensed tobacco product wholesaling networks of provincial governments.

d) Review the relevant mechanism, policies, and laws to make necessary amendments or request competent authorities to make amendments after reaching agreements with relevant Ministries.

e) Establish and request the Government to approve the National Project on Prevention of cigarette smuggling.

2. Responsibilities of other Ministries:

The Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Health, and relevant Ministries, within their competence, shall cooperate with the Ministry of Industry and Trade in implementing the solutions and policies in this Planning.

3. Responsibilities of provincial People’s Committees:

Cooperate with Ministries in inspecting and supervising the implementation of this Planning; provide instructions for Services of Industry and Trade on cooperate with local units in performing the following tasks:

a) Review the tobacco product wholesaling and retailing network plannings of the provinces that already have them before this Decision takes effect, and make amendments if they are not conformable with the national tobacco product wholesaling network planning.

b) Elaborate local tobacco product wholesaling and retailing plannings for the products that have not had the tobacco product wholesaling and retailing network planning.

The number of tobacco product retailers in each province is determined based on the population and areas of the tobacco shops, the distance between two shops, demand of the market, tendency of consumers, the local socio-economic development, the financial capacity and experience of sellers.

c) Take appropriate measures for strictly controlling the sale of tobacco product, avoid loss of the State budget as well as ensuring the health of consumers.

d) Send periodic reports on the implementation of this Planning to the Ministry of Industry and Trade.

a) Local governments shall issue licenses to tobacco product sellers within their province based on the Decision to approve this Planning during the course of implementation of the tobacco product wholesaling network planning. Request the Ministry of Industry and Trade to make amendments to the planning that are necessary for suiting the demand, socio-economic development of each locality

4. Responsibilities of tobbaco product manufacturers:

a) Cooperate with The Ministry of Industry and Trade and local governments in disseminating this Planning and providing guidance for enterprises within their systems on the implementation of this Planning and other laws.

b) Select capable tobacco product distributors, wholesalers, and retailers; comply with the laws on selling tobacco product.

5. Responsibilities of VTA shall:

a) Cooperate with The Ministry of Industry and Trade and local governments in disseminating this Planning and providing guidance for enterprises in VTA on the implementation of this Planning and other laws.

b) Suggest and organize the cooperation between tobacco product manufacturers and tobacco product sellers in order to improve the connection in selling tobacco products.

c) Make suggestions on solutions, mechanisms, and policies serving the implementation of the approved planning.

Article 2. This Decision comes into force from the day on which it is signed.

Article 3. Ministers, Heads of ministerial agencies, the President of the provincial People’s Committee, involved organizations and individuals are responsible for the implementation of this Decision./.

APPENDIX

EXPECTED NUMBER OF TOBBACO PRODUCT SELLERS BY 2020
(enclosed with the Decision No. 2332 /QD-BCT dated April 12^th 2013 of the Minister of Industry and Trade)

1. The maximum number of tobacco product distributors nationwide by 2020 is 350.

2. The maximum number of tobacco product wholesalers nationwide by 2020 is 1,760.

3. Maximum numbers of tobacco product wholesalers in each province and city by 2020: