Vietnam’s beer market foaming up

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BEERFESTASIAWhile many businesses have been forced to cut production or even shut down over the economic turbulence, Vietnam’s beer making industry has continued to post explosive growth, local Tuoi Tre newspaper reported.

In Vietnam, Southeast Asia’s biggest beer consumption country, a large proportion of the population are beer lovers, and it is seen as a heaven for both local and international brewery investors to boost their business. However, many are concerned that the country will soon experience a beer surplus when supply exceeds demand.

The Saigon Beer Alcohol Beverage Corporation, commonly known as Sabeco, is leading the race to open new breweries in the country. Its latest investment is the Saigon-Kien Giang brewery, which has recently broken ground in the Mekong Delta province of Kien Giang. Once operational, it is expected to produce 50 million liters of beer per year.

In late 2013, the Ho Chi Minh City-based Sabeco started two similar projects in southern Can Tho City and central Binh Thuan province. Both are worth $21.32 million and have a capacity of 50 million liters per year. Sabeco is operating 24 brewery projects nationwide, with 20 facilities already active producing a total of 1.8 billion liters of beer a year. Sabeco has said it would invest in three more projects from now till 2015.

Meanwhile, Habeco, the northern rival of Sabeco, is also operating dozens of breweries in the northern and central regions including Phu Tho, Hai Phong, Quang Ninh, Nam Dinh, Thanh Hoa, and Quang Binh. Several localities like central Nghe An, northern Phu Tho, capital Hanoi and southern Binh Duong are home to beer making plants of at least two brewers.

Foreign firms are also showing their interest in this lucrative market. Denmark-based Carlsberg are cooperating with several local businesses to invest in breweries, while US brand Budweiser is waiting to inaugurate its first Vietnamese facility in the near future.

Meanwhile, Japanese player Sapporo Vietnam is planning to increase the capacity of its $42-million facility in southern Long An Province from 40 million liters to 100 million liters per year, the report quoted its General Manager Hirofumi Kishi as saying. The official said Sapporo will also expand into other localities beside the Mekong Delta provinces.

The reasons behind the race to expand production in Vietnam’s beer market could be the fact that many tariffs are expected to be lifted in light with the free trade agreements the country is going to sign, along with the massive local beer consumption. Imported beers are currently subject to a 45 per cent import tariff, a 50 per cent excise tax and a 10 per cent value-added tax. All of these duties will be exempt once the Trans-Pacific Partnership (TPP) agreement takes effect.

Vietnam consumed more than three billion liters of beer in 2013, up by 10 per cent from a year earlier, according to a preliminary report by the Vietnam Beer, Alcohol and Beverage Association. This year the consumption is expected to rise 5 per cent, despite the ongoing economic turmoil.

According to a report published in May 2013 by market research organization Eurowatch, each Vietnamese person consumes 32 liters of beer per year on average. Vietnam is the “beer drinking champion” of the ASEAN region, the third in Asia after China and Japan, and among the top 25 beer drinking countries globally with an annual growth rate of 15 per cent, in spite of the fact that its per capita income in 2012 was among the lowest in region, reported Eurowatch.

Vietnam will increase the special consumption tax on alcoholic beverages and cigarettes by 15-30 percentage points in mid-2015 as part of the efforts to reduce consumption, according to the Vietnamese Ministry of Finance.

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Reading Time: 2 minutes

While many businesses have been forced to cut production or even shut down over the economic turbulence, Vietnam’s beer making industry has continued to post explosive growth, local Tuoi Tre newspaper reported.

Reading Time: 2 minutes

BEERFESTASIAWhile many businesses have been forced to cut production or even shut down over the economic turbulence, Vietnam’s beer making industry has continued to post explosive growth, local Tuoi Tre newspaper reported.

In Vietnam, Southeast Asia’s biggest beer consumption country, a large proportion of the population are beer lovers, and it is seen as a heaven for both local and international brewery investors to boost their business. However, many are concerned that the country will soon experience a beer surplus when supply exceeds demand.

The Saigon Beer Alcohol Beverage Corporation, commonly known as Sabeco, is leading the race to open new breweries in the country. Its latest investment is the Saigon-Kien Giang brewery, which has recently broken ground in the Mekong Delta province of Kien Giang. Once operational, it is expected to produce 50 million liters of beer per year.

In late 2013, the Ho Chi Minh City-based Sabeco started two similar projects in southern Can Tho City and central Binh Thuan province. Both are worth $21.32 million and have a capacity of 50 million liters per year. Sabeco is operating 24 brewery projects nationwide, with 20 facilities already active producing a total of 1.8 billion liters of beer a year. Sabeco has said it would invest in three more projects from now till 2015.

Meanwhile, Habeco, the northern rival of Sabeco, is also operating dozens of breweries in the northern and central regions including Phu Tho, Hai Phong, Quang Ninh, Nam Dinh, Thanh Hoa, and Quang Binh. Several localities like central Nghe An, northern Phu Tho, capital Hanoi and southern Binh Duong are home to beer making plants of at least two brewers.

Foreign firms are also showing their interest in this lucrative market. Denmark-based Carlsberg are cooperating with several local businesses to invest in breweries, while US brand Budweiser is waiting to inaugurate its first Vietnamese facility in the near future.

Meanwhile, Japanese player Sapporo Vietnam is planning to increase the capacity of its $42-million facility in southern Long An Province from 40 million liters to 100 million liters per year, the report quoted its General Manager Hirofumi Kishi as saying. The official said Sapporo will also expand into other localities beside the Mekong Delta provinces.

The reasons behind the race to expand production in Vietnam’s beer market could be the fact that many tariffs are expected to be lifted in light with the free trade agreements the country is going to sign, along with the massive local beer consumption. Imported beers are currently subject to a 45 per cent import tariff, a 50 per cent excise tax and a 10 per cent value-added tax. All of these duties will be exempt once the Trans-Pacific Partnership (TPP) agreement takes effect.

Vietnam consumed more than three billion liters of beer in 2013, up by 10 per cent from a year earlier, according to a preliminary report by the Vietnam Beer, Alcohol and Beverage Association. This year the consumption is expected to rise 5 per cent, despite the ongoing economic turmoil.

According to a report published in May 2013 by market research organization Eurowatch, each Vietnamese person consumes 32 liters of beer per year on average. Vietnam is the “beer drinking champion” of the ASEAN region, the third in Asia after China and Japan, and among the top 25 beer drinking countries globally with an annual growth rate of 15 per cent, in spite of the fact that its per capita income in 2012 was among the lowest in region, reported Eurowatch.

Vietnam will increase the special consumption tax on alcoholic beverages and cigarettes by 15-30 percentage points in mid-2015 as part of the efforts to reduce consumption, according to the Vietnamese Ministry of Finance.

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