Local Beer Market to Become Effervescent

Local Beer Market to Become Effervescent

According to the plan to develop Vietnam’s alcohol, beer and beverage sector by 2010, the country aims to supply an output of 1.2 billion litres in 2005 and 1.5 billion litres in 2010. Of the output, over 50 per cent is to be supplied by the Vietnam Alcohol, Beer and Beverage Corporation, more than 20 per cent by foreign-invested enterprises (FIEs), and nearly 30 per cent by businesses in other economic sectors and small-scale production bases.

Under the plan, investment will be mainly poured into developing breweries with high production capacities, effective businesses with a good management of food safety, and products with stable quality and reasonable prices. Regarding FIEs, Vietnam is to only license new joint ventures or increase production capacity of existing breweries. The operational foreign-invested projects are required to focus on fully tapping their designed capacity. To increase the market value of the industry all breweries in the country, especially state-run ones, are paying special attention to speeding up beer production of the more popular brands, restructuring sales networks to expand both local and overseas markets, and intensifying investment in technology renovation.

Predicting that Vietnam’s annual beer consumption per head will increase from 10 litres in 2000 to 13 litres in 2005, 16 litres in 2010 and 25 litres in 2020, the Vietnam Alcohol, Beer and Beverage Corporation has recently poured millions of US dollars into raising capacity of its large affiliates in major urban areas such as Hanoi and Ho Chi Minh City. Among its beer products, around 70 per cent comes in the form of draught beer, 20 per cent bottled beer and 10 per cent canned beer.

Besides production expansion, breweries in Vietnam attach great importance to market development and product diversification, which is exemplified by the fact that many local and foreign brands such as Hanoi, Saigon, Halida, Tiger, Heineken, Carlsberg and San Miguel have appeared nationwide, and other kinds of draught beer have become more and more common, not only in luxury hotels but also restaurants. The Hanoi Beer Company, which holds a considerable market share in bottled beer, is reinforcing distribution channels in the northern delta; developing sales networks in northern mountainous provinces, the central region with particular focus on Hue and Da Nang, and the southern region, especially in Ho Chi Minh City, Vung Tau and Can Tho; and exporting bottled and canned beer to Japan, the US and several European countries.

Although prices of beer products in the domestic market rose slightly in the first half of this year since the amended special consumption law took effect on January 1 with the tax rate imposed on canned beer increasing 10 per cent to 75 per cent, Vietnam’s beer output climbed 5.6 per cent to 512.7 million litres in the first half of this year, of which 317.4 million litres were produced by state-owned enterprises, 136.3 million litres by FIEs, and 59 million litres by non-state businesses, announced the General Statistics Office. The country churned out 1,049 million litres of beer last year, up 16.8 per cent against the previous year, of which 654 million litres were produced by state companies, 274 million litres by FIEs, and 121 million litres by non-state enterprises.

Between 1991 and 2000, Vietnam’s beer industry, which included 469 beer businesses, including six FIEs, with a combined capacity of 1,021 million litres by early 2001, recorded annual growth of more than 10 per cent with 8.5-9 litres consumed by each person every year. Draught beer makers in localities, all small-scale, ran at 62 per cent of their designed capacity in the period, meeting growing demand of low- and middle-income earners, especially in industrial parks and towns.   

• Dong Phong