Sabeco’s story is a lesson in brand management

A miss is as good as a mile. Sabeco made a mistake and now it has to pay a heavy price for the carelessness. How can such a big enterprise misunderstand simple branding? Experts are called on to reconsider processes in state asset management.

As VietNamNet has reported, SABECO, a big Vietnamese brewery brand is now facing the risk of losing its brand to the hands of a foreign partner. A lot of businesses and experts have voiced their opinions about the case.

Tran Anh Tuan, the founding member of The Pathfinder, a brand consultancy firm:

Currently, many big enterprises still do not have a brand management division. I don’t know if Sabeco had its brand valuated, set conditions for choosing partners or applied any policies on intellectual property. Or it only took care of possible turnover when it assigned a foreign partner to cover so many (20) markets. It should have been allowed to only distribute products in Singapore or some neighboring markets. After only one or two years, if Sabeco has good business results, it could have allowed the foreign partner to cover other markets as well.

It is a shame that Sabeco has not paid appropriate attention to protecting its main asset – the brand, especially when this is not a kind of franchise but just an exporting contract for distribution.

Let’s see what the US based McDonald’s did. The enterprises which obtain a franchise from McDonald’s not only have to pay a lot of money for the right to use the multi-dollar brand, but they also have to meet many other requirements set by the US group.

Vo Thi Ha Giang, representative from Trung Nguyen Corporation

In 2002, when Trung Nguyen registered its trademark in the US, the registration was refused by US management agencies, because a company in the US had registered the Trung Nguyen trademark in the US already.

Trung Nguyen later found out that the US company which registered Trung Nguyen trademark before was a food distribution company owned by a Viet Kieu. Trung Nguyen then tried to negotiate with the owner of the company and reached an agreement. The company got the right to act as the sole distributor of Trung Nguyen products for two years in the US. In return, the company transferred the registered Trung Nguyen trademark to Trung Nguyen Company.

After the case, Trung Nguyen Company has been trying to register Trung Nguyen, G7 trademarks in more than 50 countries around the world.

Le Van Tri, Deputy General Director of Casumina:

In 1991-1997, every year, Casumina sold four million automobile tires to different places in the world, but it is selling tires under the names requested by its partners. At that time, Casumina was not very aware of trademark protection. Therefore, after the foreign partners shifted to place orders with Chinese producers, no foreign consumer knows about Casumina.

Another lesson was drawn in 2004, that only when selling tyres to the world’s famous automobile manufacturers, does Casumina agree to let Casumina trademark to stand together with other trademarks.

We do not authorize any one to use Casumina trademark, we only allow them to sell Casumina products in certain countries or territories, provided that the partners can meet the requirements in sales, volume and cooperate to build up the sales system and the Casumina trademark.

I think that we should not allow any foreign partner to cover too large of a market. The granting of the right for exclusive distribution could be a double edge sword. Trademark protection is a really costly game. Therefore, it would be better to try to protect trademarks in the potential markets, but enterprises should not allow anyone to use their trademarks.

Nguyen Van Hau from Nguyen Van Hau and Associate Law Office:

If referring to the current laws, the fact that Satraco, a subsidiary of Sabeco, did not report all the details of the contract it signed with the Singaporean partner to the Chair of the Board of Director, does not comply with the law (the state is holding a large proportion of stakes in Sabeco).

Sabeco is the brand of a big Vietnamese enterprise, and the brand must be valuated in commercial transactions with foreign partners.

If the Singaporean partner has good will, it will agree to change the name of the company. If not, Sabeco will have to terminate the contract and t

iake legal proceedings to take back the brand.- Saigon tiep thi

Tags: Sabeco