fines Forever Living distributor
HCM CITY — The
distributor of Forever Living Products, which used a multi-level marketing
scheme to sell health and personal products, has committed violations of product
quality, labour, trade and tax laws, a HCM City Trade Department investigation
The department will fine
the Lo Hoi (Aloe) Trading Co, the Viet Nam distributor of US-based Aloe Vera of
America (AVA), roughly VND17.2 million (over US$1,000) and has made a demand for
VND7.1 billion ($437,500) in unpaid taxes.
The company sold products
imported from AVA through direct marketers who were paid commissions. The number
of such direct marketers recruited to sell Forever Living Products in Viet Nam
had reached over 110,000 by the end of August 2006.
inspectors discovered that as many as 22 foreigners were working for the Lo Hoi
Trading Co from January 2004 to December 2005, including 21 distributors,
working under the title of international consultants, and one financial
consultants provided trade services and conducted business in Viet Nam without
lawful business registration certificates or work permits.
Inspectors also found that
Lo Hoi Trading Co sold products to its marketers at prices far higher than
actual cost. Forever Bee Pollen, a kind of nutrition tablet, had a cost of only
VND3,000 per tablet, but the wholesale price to marketers was VND244,000 per
Marketers then retailed
the tablets at VND348,000 each, or 117 times higher than the actual cost.
The Sonya brand of mascara
cost VND14,000 per unit, but the wholesale price to distributors was set at
VND171,000, 12 times higher, and the retail price at VND244,000 per unit, 15
Tests conducted on five
samples of Forever Living cosmetics showed that the Sonya Colour Collection, a
kind of powder made in Canada, did not meet the standards written on the
packaging. — VNS