Market experts forecast the local beer market to bubble over in the time ahead owing to two of the largest domestic brewers going public, and increased presence of foreign players. 

 

Sai Gon Beverage Corporation (Sabeco) and Hanoi Beverage Corporation (Habeco) were restructured recently, emerging as joint stock companies. They have since unveiled plans to raise their share of the ever more discerning local market, targeting outputs of 1 billion and 900 million litres of beer by 2010, respectively.

Other domestic producers have put down their drinks to speed up construction of breweries with annual output of more than 50 million litres each. Most will be put into operation within the next few years.

Foreign enterprises including Asia Pacific Breweries (APB), SAB Miller, Kronenbourg and Miguel Vietnam have also accelerated their investments in local beer.

Asia Pacific Breweries boasts four plants in Vietnam and has set up a joint venture with Quang Nam province’s VBL, which churns out 500 million litres a year.

SAB Miller and Kronenbourg have also established joint ventures with local partners Vinamilk and the Cigarette Corporation, respectively, to build breweries with estimated annual output of at least 100 million litres.

Meanwhile, San Miguel Vietnam hopes to lift its annual output to 50 million litres.

The Director of the Ministry of Industry and Trade’s light industry department, Phan Chi Dung, said with an annual growth rate of 18 percent, the nation’s beer market should reach 3.5 billion litres by 2010.

Dung, however, foresees an increasing industry trend for small-sized breweries to be dissolved or merged with larger ones.

Smaller beer producers could act as sub-contractors for larger enterprises, he said.

“Large breweries belonging to dominant producers will proliferate in the near future whereas smaller ones will be restricted.”

Habeco general director Nguyen Van Viet, admitted smaller breweries are often forced to merge as they can not stay afloat under the burden of escalating production costs.

Besides the soaring cost of input materials, special consumer tax on beer is also set to jump from 30 percent to 45 percent.

The director of the Ha Tay Food Co, Nguyen Thi Phuong, said a price increase of roughly 10 percent is not enough to offset input material costs rising 75-80 percent.

There are around yet 400 breweries nationwide, only five of them produce more than 100 million litres a year. The remainder are on a much smaller-scale and focus mainly on draught beer.

Last year Sabeco accounted for 35 percent of the country’s beer market on output of 640 million litres. The corporation last year produced nearly 400 million litres of beer with the help of sub-contractors.

(Source: VNA)

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