Beer market competition fizzes

Vietnam’s beer market competition is tipped to get stiffer with an annual 20 per cent growth and the relaxing of a special consumption tax.

The special consumption tax on beer was reduced from 75 per cent in 2009 to 45 per cent in 2010 and will be eased further to 30 per cent in 2012.

The head of the Ministry of Industry and Trade’s (MoIT) Light Industry Department Phan Chi Dung said around 2.7 billion litres of beer would be produced in 2010.

Of this figure, the Saigon Beer Alcohol Beverage Corporation (Sabeco), currently managing 35 per cent of total market share contributed 1.1 billion litres, Hanoi Beer Alcohol Beverage Corporation (Habeco) added 600 million, Dutch-based Heineken N.V supplied 400 million litres and Asia Pacific Breweries Limited with 300 million litres of Tiger beer, all made in Vietnam-based factories.

Sabeco Trading Company Limited director Van Thanh Liem said the race for seizing Vietnam’s beer market had attracted plenty of investors.

To lure customers, breweries have introduced extensive sales promotion campaigns or exclusive outbound tours.

The domestic beer market also saw the strong presence of high-class imported beer brands such as Lucky beer- an Australia-based trademark but bottled in China, Budweiser, BitBurger, Bavaria, Cooper or Corona.

Imported Heineken beer was also seen the market though Heineken already had manufacturing bases such as the Vietnam Brewery Limited in Vietnam.

Industrial experts said that this trend had posed big challenges to domestic beer manufacturers and traders.

Despite owning big market shares, domestic manufacturers have taken strong measures to maintain their leading positions against powerful foreign rivals.

Sabeco reshuffled its agent network with its agents falling from 1,700 in 2005 to 1,300 presently. However, its consumption rose from 148.5 million litres in 2005 to one billion in the year ending November.

However, the deputy MoIT minister Trade Ho Thi Kim Thoa said beer market competition would be increasingly severe as more rivals jumped into the race and local breweries still had low competitiveness.

For example, Sabeco only has four beer brands and is yet to have any high-class brand to serve the growing middle class in the country.

Habeco, which holds dominant stakes in Hanoi and northern market and is the second largest brewery in Vietnam behind Sabeco, faces the same dilemma. – VIR

Tags: Vietnam beer market