The Finance Ministry has ordered concerned agencies to take necessary steps to contain milk prices nationwide and punish those responsible for undue escalations.
The order comes after some distributors raised prices despite a government policy to stabilize the market for the Tet (Lunar New Year) season.
In a note sent to city and provincial governments, the ministry asked market management as well as finance, trade and industry, and taxation departments to check if milk producers and retailers in the area have obeyed rules on registering, listing and announcing prices.
It said those increasing their prices illegally should be strictly punished.
Dairy retailers in Ho Chi Minh City early this month were prompted to raise formula milk prices by five percent after official distributors of Mead Johnson, Abbott and Dutch Lady halted supplies and announced they would raise their milk prices by 7-10 percent, citing the weaker dong and higher wages.
City and provincial agencies were asked to force businesses to cancel the price rise and revert to the old prices.
Last December, the Prime Minister called for action to stabilize prices as demand surges during the Tet season.
The agencies were authorized to fine dairy firms which violated price management regulations, collect money earned from the price hike or revoke business registration certificates, depending on how the extent of violation.
Results of the inspection, which covers other consumer goods as well, are supposed to be sent to the ministry by Jan. 20.
Consumption of formula milk in Hanoi, HCMC, Da Nang and Can Tho has reached VND3.2 trillion (US$173 million) a year, according market research firm TNS Vietnam.
The survey of 2,150 families in major cities showed that dairy firms in 2009 had raised their prices by an average of 8 percent.