Developing potential of the beer industry in Vietnam

Vietnam has a young population with about 33 million people aged 20 to 40 which rate of
consumption of beer is highest. The rate of economic growth of Vietnam in the period 2008-2010 is
forecast over 8%. Accordingly, GDP per person will reach $1000 in 2010, boosting demand for beer to
ensure the growth of in-depth Vietnamese beer market in the future. The quantity of beer in Vietnam is
forecast to continue growing about 13% - 14% per year in the coming years.
About scale: On average, a Vietnamese person drinks 14 liters per year. In 2005, the capacity of
Vietnam beer reached 1.29 billion liters, in 2006 reached 1.37 billion liters, in 2008 expected to reach
nearly 1.5 billion liters and projected to 2015 is 2.5 billion liters. The amount of beer consumption is
low compared with developed countries in the region and the world. In the U.S. is 85 liters per person
per year; in the Czech Republic is 171 liters per person per year; in Germany is 117 liters per person per
year. However, this consumption is high with developing countries.
The rate of beer investment has very high increase from the first decade 1990 to present, with the
participation of all the economic sectors such as enterprises, joint venture, central, local, 100% foreign
capital, private, shares. The quantity of beer grows with high-speed: 30% from 1990-1996, 10-15% from
1996 to present. The growth rate is forecast 8-10% in the coming period, the quantity forecast in 2010 is
1.5 billion liters.
About structure: The amount of beer consumption is mainly concentrated in big cities and
increase of wedding season (near Tet), festival and special in summer. In this occasion, beer factories
work with full capacity that is still not enough beer to supply the market for consumers.
State policies
Beer became a popular beverage. Needs are increasing as income of Vietnamese increase,
especially in summer. Therefore, developing beer to meet the increasing demand of people is a postulate.
Moreover, the beer industry is being brought revenue for the state budget, created more jobs, so the
development of beer sector is an actual objective.
Beer is an alcohol drink. Therefore, beer is always listed on one of the limited consumption and
special consumption tax:
- Beer in bottles or cans: 50% + 10% VAT
- Slight beer: 30% + 10% VAT
- Light beer is 10% + 10% VAT
The supplier
According to statistics by the Ministry of Industry and Commerce, Vietnam has nearly 350
factory producing beer, distributed in most provinces and cities of the country. There are about 20
factories which have capacity 50 million liters per year, the rest of the factories have capacity from 10 to
20 million liters per year and 268 factories have capacity below 1 million liters per year.
The capital to produce beer: in 2005: 2335,7 billions VND, in 2006: 2941,6 billions VND, in
2007: 4176,8 billions VND, in 2008 5757,7 billions VND (forecast).
According to market researcher, current products and drink makes up the domestic market is
product of the Joint Venture Company or foreign investment. Beer market advanced mainly brand beer,
soft drinks, such as foreign Heiniken, Carlsberg, Tiger and some brands of beer as Special Saigon, Hanoi

Beer Premium ... Secondary market with beer brands HABECO, SABECO, HUDA ... is "converging"
the whole country but not a large percentage.
Market share of beer producer:
Capacity
(million
liter /
year)

Market
Share
2006

Place of
factory

Type of company

Joint stock
company convert
from state company

Brand name

Main product

SABECO

333 beer, Sai Gon Lager,

Sai Gon Special, Sai Gon
Export

600

31%

HCM, Can
Tho, Soc
Trang, Yen
Bai

Vietnam
Brewery Ltd

Heniken, Tiger, Ankor,

Bivina, Amber Stout,
Coors Light, Foster, BGI,
Larue Export

400

20%

HCM, Ha Tay

Joint venture

HABECO

Slight beer, Hanoi beer

>200

10%

Ha Noi, Hai
Duong

Joint stock
company convert
from state company

Thanh Hoa
Portal

Hanoi beer, Thanh hoa

beer

100

6%

Thanh Hoa

Joint stock
company convert
from state company

San Miguel
Vietnam
Company

San Miguel

50

7%

Nha Trang

100% foreign
investment

South East Asia

Beer Factory &
Viet Ha Beer
Factory

Halida, Carlsberg

N/A

5%

Ha Noi

Joint venture

Hue Brewery
LTD

Huda, Festival

100

3%

Hue

Joint venture

Vinamilk &
SabMiller
venture

Zorok

100

N/A

Binh Duong

Joint venture

Manufacturing technology

According to the Ministry of Industry and Commerce, beer factories with capacity above 100
millions liter per year import modern machines from developed countries. Large domestic enterprises
such as Sabeco, Habeco have continued to invest new equipments leading the country which compared
with joint venture and ensure the safely food hygiene. The local beer productions have difficult because
of backward equipments and not ensuring the safety of food hygiene. In the next time, the tax rate is not
incentive, these local facilities could be stop their production.
Materials
Materials for the industry depend on importing, accounting for 60-70% of raw materials for
production, in which main material is malt. According to the Vietnam Beverages Association, we import
the average 120,000 to 130,000 tons of malt, equivalent to 50 million USD each year. Expected by 2010,
this amount will increase to 100 million USD each year.
Imported malt may be replaced by malt which processed from circuit in domestic. However, the
circuit cultivation is just tested and this solution does not show the feasibility.