Foreign beer firms eager to quench Vietnamese thirsts

The leading global brewer, Anheuser-Busch InBev (AB InBev) is now looking to open its first brewery in the southern province of Binh Duong. The new brewery, housing state-of-the-art facilities, produces world-class beverages of a consistent quality.

This major development is a turning point for AB InBev as the company plans to strengthen its presence in Vietnam, meeting the potential growth of the local market.

AB InBev’s general director Ricardo Vasques said that the plant would be operational in May and explained that the firm had decided to invest in Vietnam because it saw “a large amount of business potential” here.

“Vietnam has a strong beer culture, and as such, is a substantial market for many brewers,” he said. Vietnam also has “a friendly business environment, a competitive labour force, and is strategically located within the ASEAN region to reach the world’s first-class active trade centres. Our brewery strives to enrich local communities, using environmentally friendly processes, as well as providing job opportunities for the Vietnamese people,” he added.

Vietnam’s market expects fierce competition in the coming years, but AB InBev is confident that it can deal with any other newcomers to the market. “Only a few international brands have established a presence here. This demonstrates that there is both a substantial opportunity, but also challenges in the form of competition from established brands, and from new brands looking to enter the market,” he said.

Belgium-based AB InBev is one of the world’s five top consumer product companies which brews – amongst other well-known beverages – the world’s largest-selling beers, Budweiser and Bud Light.

AB InBev is not the only foreign brewer eyeing a piece of the lucrative Vietnamese beer market. In February, Thai Beverage (ThaiBev), owned by Thailand’s third richest man, Charoen Sirivadhanabhakdi, made a $1 billion offer to buy a 40 per cent stake in the Saigon Beer, Alcohol, and Beverage Joint Stock Company (Sabeco). ThaiBev’s offer was set at the price of VND80,000 ($3.8) a share, which was 60 per cent higher than the market price.

Sabeco is currently 89.6 per cent owned by the Ministry of Industry and Trade, with a modest 5 per cent owned by Heineken, who is also keen to become a strategic shareholder.

In June, Japan’s Sapporo, which officially entered Vietnam in 2011 with the construction of a plant in the southern province of Long An, expressed its intention to ramp up its production from an output of 40 million litres to 100 million per year and expand its distribution network throughout the country.

Domestic firms have also been busy with expansion plans. In December last year, Hanoi Beer, Alcohol, and Beverage Joint Stock Company (Habeco) started operation at its $13.4 million Hanoi-Quang Tri brewery.

Last July, Masan, one of Vietnam’s largest private companies, officially ventured into the sector with its $12 million acquisition of Phu Yen Beer.

Vietnamese spent at least $3.1 billion guzzling 3.14 billion litres of beer in 2014, excluding imported beer, according to the Vietnam Beverages Association (VBA). Sabeco accounted for the biggest market share with 1.3 billion litres. Habeco followed with 637 million litres. Next were other brands such as Heineken, Tiger, and Huda with combined sales of 890 million litres.