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Vietnam has issued new regulations that may make it more difficult for foreign companies to advertise their wares.

The regulation, announced by the Ministry of Culture and Information on Thursday, stipulates that equal time must be given to foreign and domestic products. Advertising executives said this would be exceptionally difficult, since the vast majority of high-spending campaigns were for foreign products.

"It will definitely create a few problems," said the director of one foreign agency. "We may have to consider taking up some local products to balance it out, but I'm not sure that there are that many local products that are that worthwhile."

The issue is delicate. Foreign agencies are only allowed to have representative offices in Vietnam, and are therefore technically barred from making any money. However it is widely recognized that large multinational clients want to use international agencies.

At the moment, they skirt around the problem by billing in third countries, so that they are not actually generating revenue in Vietnam. But they are certainly not in a strong position to lobby the government to take a more realistic view of the mix of foreign and local advertising.

"The economic police stop by periodically just to say: 'We know you're here, we're watching you,'" said one foreign industry executive.

Exactly how much space is filled by ads for foreign products is hard to determine. but they clearly dominate in certain media. "Television advertising is definitely skewed in favor of foreign products," said a media analyst.

Some said that the rule would be difficult to police. Current regulations restricting advertising to five percent of air time are widely flouted. "It's nowhere near three minutes now - it's more like 12. Occasionally there's a bit of a crackdown and then the stations start selling more time again," said the director of a multinational agency.

If it is enforced, it could be bad news for advertisers' wallets. "If you get a lot of foreign firms scrambling for limited space, then it could send the cost rocketing up," the media analyst said.

Copyright 1996 Asia Times.

(c) 1996 Chamber World Network International Ltd.

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