Are large Vietnamese beer imports abnormal?

Brewery products from Belgium, Germany, the US, Mexico, and the Netherlands have been flowing to Vietnam. The Ministry of Industry and Trade (MOIT) has allowed Vietnam Brewery Company to import a large volume of Heineken products. According to customs agents, foreign products are flowing to Vietnam because of the sharp decrease in the luxury tax.

Why so much imported beer?

MOIT has allowed the Vietnam Brewery Company to import 650,000 boxes of Heineken brand beer (24 330 ml-cans per box). The declared imports will be used for marketing and market research, which means that they must not be used for retail sales.

However, observers have pointed out that 650,000 boxes of beer are too many for marketing and market research.

According to an official from the customs agency at Saigon port, he has never seen such a large imported beer consignment before. 650,000 boxes of beer means 5.15 million liters of beer valued at 195 billion dong. Most beer products go through Cat Lai port, which accounts for 80 percent of the imports and exports going through HCM City and neighboring provinces.

Tran Huy, a beer distributor in HCM City, said there are two types of imported Heineken beer: 500 ml cans and 250 ml cans. Meanwhile, the 330ml cans are produced in Vietnam. An official from Vict port states that if companies want to conduct market research, they only need to import small volumes of beer. He also noted that imported items are generally products not produced in Vietnam, so it is unlikely that companies import such a high volume of beer just to conduct market research.

A brewery company representative said domestic production has exceeded demand. Many breweries have left their production lines idle, so it is very unusual to see so much imported beer.

The beer consumption level per capita is estimated to be 28 liters per year. Meanwhile, there are 350 breweries nationwide, including 20 factories which have the capacity to produce over 20 million liters per year, 15 factories with a capacity of over 15 million liters, and 260 workshops with a capacity of less than one million liters per year.

Lower tariffs prompt more imports

While 650,000 boxes of Heineken beer are arriving in Vietnam, a lot of other brewery products are also flowing into the domestic market.

Most recently, at international food and drink exhibitions, imported beer products were introduced alongside domestically made products. The salesmen said foreign producers were looking for distributors to sell their products in Vietnam.

The importer of Australian Lucky brand beer is now looking for sales agents to be in charge of distribution in Hanoi and Da Nang. Australian Lucky is an Australian beer bottled in China.

Other products like Leffe Brown and Leffe White, sourced in Belgium, have been available at many supermarkets and retail stores in HCM City. The products are very expensive, priced at 66,500 dong per 330ml bottle. Hoegaarden White, from Belgium and imported by An Nam Food Company, is popular among high-income families.

Meanwhile, Mexican-brand Corona and American-brand Budweiser are dominating restaurants, hotels, and bars. There are many other kinds of imported beer, including Bit Burger, Cooper, and MOA.

According to the customs agency at Saigon port, revenue from beer imports through Cat Lai port reached $282,661, while 33,842 boxes and 40,140 bottles received custom clearances. The import revenue has increased by nearly 55.2 percent over the same period from last year

According to the customs agency at Cat Lai port, the tariff decrease is a very important factor leading to a sharp rise in imports. Under current regulations, imported beer faces three taxes: an import tax (47 percent), luxury tax (45 percent), and VAT (10 percent). The luxury tax has dropped sharply. The tax rate was 75 percent in 2009 and will be 30 percent in 2012.- Tuoi tre

Tags: Vietnam Brewery industry