Brewers prepare for IPO in beer-crazy Vietnam

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Vietnamese down record amounts of beer at a time when its largest state-owned breweries Sabeco from Ho Chi Minh City and Hanoi-based Habeco are preparing the submission of bids to the government this month for their initial public offerings at the two domestic stock exchanges later this year. The companies have a market share of 40.9 per cent and 18.4 per cent, respectively and, combined, dominate the beer market in the country

The stake sales are seen as an opportunity for international beer companies to expand into Vietnam as large global brewer are seeking to secure minority stakes, especially those still without a presence in Vietnam, Ditty said.

Heineken, which is already number two in the Vietnamese market with a share of 23 per cent, Anheuser-Busch InBev, as well as Japan’s Asahi and Kirin are among about half a dozen foreign companies that registered interest in a Sabeco stake. Other interested parties reportedly include China’s Tsingtao, Yangjin and Harbin, as well as Thailand’s Boon Rawd and ThaiBev.

Vietnam’s Ministry of Industry and Trade valued its 89.59-per cent share in Sabeco at $1.8 billion, while it 82-per cent holding in Habeco is worth $404 million.

Vietnam is forecast to lead Southeast Asia to see volume growth of 2.3 billion liters up to 2021, market researcher Euromonitor International said in its July report. An expanding Vietnamese middle class and youthful population have helped drive a 300-per cent surge in beer demand since 2002, according to Euromonitor, which estimates the market was worth $6.5 billion last year.

However, the beer boom in Vietnam doesn’t have just positive sides. A study jointly conducted by Vietnam’s health ministry and the World Health Organisation last year showed that 77 per cent of Vietnamese men and about a third of women drink liquor and beer, and nearly half of them drink at hazardous levels. The men who do drink tend to drink a lot, and 8.7 per cent suffer some form of alcohol dependence or disorders, compared with 4.6 per cent across the Western Pacific region.

Altogether, Vietnamese drank 3.8 billion liters of beer last year. That was an average of 42 liters per person, four liters more than 2015, according to data collected by the trade ministry.

The government is now trying to slow the booze flow. A special consumption tax aims to increase the excise tax rate on beer annually to reach 65 per cent in 2018. The National Assembly is considering proposals to turn off beer taps during lunch hours and the late evening. It’s also weighing whether to prohibit the sale of alcohol to pregnant women and to ban government employees from drinking during work hours.

 

 

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Vietnamese down record amounts of beer at a time when its largest state-owned breweries Sabeco from Ho Chi Minh City and Hanoi-based Habeco are preparing the submission of bids to the government this month for their initial public offerings at the two domestic stock exchanges later this year. The companies have a market share of 40.9 per cent and 18.4 per cent, respectively and, combined, dominate the beer market in the country The stake sales are seen as an opportunity for international beer companies to expand into Vietnam as large global brewer are seeking to secure minority stakes, especially those...

Reading Time: 2 minutes

Vietnamese down record amounts of beer at a time when its largest state-owned breweries Sabeco from Ho Chi Minh City and Hanoi-based Habeco are preparing the submission of bids to the government this month for their initial public offerings at the two domestic stock exchanges later this year. The companies have a market share of 40.9 per cent and 18.4 per cent, respectively and, combined, dominate the beer market in the country

The stake sales are seen as an opportunity for international beer companies to expand into Vietnam as large global brewer are seeking to secure minority stakes, especially those still without a presence in Vietnam, Ditty said.

Heineken, which is already number two in the Vietnamese market with a share of 23 per cent, Anheuser-Busch InBev, as well as Japan’s Asahi and Kirin are among about half a dozen foreign companies that registered interest in a Sabeco stake. Other interested parties reportedly include China’s Tsingtao, Yangjin and Harbin, as well as Thailand’s Boon Rawd and ThaiBev.

Vietnam’s Ministry of Industry and Trade valued its 89.59-per cent share in Sabeco at $1.8 billion, while it 82-per cent holding in Habeco is worth $404 million.

Vietnam is forecast to lead Southeast Asia to see volume growth of 2.3 billion liters up to 2021, market researcher Euromonitor International said in its July report. An expanding Vietnamese middle class and youthful population have helped drive a 300-per cent surge in beer demand since 2002, according to Euromonitor, which estimates the market was worth $6.5 billion last year.

However, the beer boom in Vietnam doesn’t have just positive sides. A study jointly conducted by Vietnam’s health ministry and the World Health Organisation last year showed that 77 per cent of Vietnamese men and about a third of women drink liquor and beer, and nearly half of them drink at hazardous levels. The men who do drink tend to drink a lot, and 8.7 per cent suffer some form of alcohol dependence or disorders, compared with 4.6 per cent across the Western Pacific region.

Altogether, Vietnamese drank 3.8 billion liters of beer last year. That was an average of 42 liters per person, four liters more than 2015, according to data collected by the trade ministry.

The government is now trying to slow the booze flow. A special consumption tax aims to increase the excise tax rate on beer annually to reach 65 per cent in 2018. The National Assembly is considering proposals to turn off beer taps during lunch hours and the late evening. It’s also weighing whether to prohibit the sale of alcohol to pregnant women and to ban government employees from drinking during work hours.

 

 

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