Beer behemoths feel the brunt of curfews and lockdowns in major consumer markets

Beer behemoths feel the brunt of curfews and lockdowns in major consumer markets. Source: freepik.com

SABECO last week revealed that its post-tax profits plunged 68 per cent on-year in the third quarter to $20.7 million, in which profits for the first nine months in total fell 25.7 per cent to $110 million as sales dropped by 13.6 per cent to $755.2 million.

“The tough pandemic in the summer with lockdowns and strict social distancing measures imposed in Vietnam, as well as extended curfew in Ho Chi Minh City and the southern provinces, affected the group’s business performance during the third quarter. As a result, the group reported lower profit achievements compared to the same time last year,” explained a SABECO statement.

Nevertheless, administrative expenses have been better controlled, at nearly $18.56 million over the nine months, lower than the same period last year by more than $5.87 million. Employee costs continue to be the largest expense in corporate governance.

Vietnam’s biggest brewer has set a target revenue of $1.33 billion and net profits of $208 million for 2021, 20 and 7 per cent increases on-year, respectively.

Its newest product, Saigon Chill, is regarded as one of SABECO’s best weapons to recover its sales, along with restricting spending to essentials while constantly looking for new high-performance opportunities in the market.

This year SABECO’s ambition was to continue moves to take over the premium beer segment by targeting enlightened, optimistic, and sociable Vietnamese consumers in the context of a rising number of consumers paying more attention to products with better quality and taste, and increased willingness to pay higher prices.

According to Vietcombank Securities, SABECO will face increasing competition and advertising costs, which will continue to increase if the firm wants to improve its market share in the segment.

Meanwhile, Heineken N.V is in a similar situation in Vietnam, one of the world’s largest and fastest-growing beer markets.

“Beer volume in Asia-Pacific declined organically by 37.4 per cent, reflecting the impact of lockdowns and restrictions to contain COVID-19 in Vietnam, Cambodia, Indonesia, and Malaysia. In Vietnam, beer volume declined by more than half following a strict lockdown, with the most stringent measures in our strongholds in major cities and in the south,” a Heineken N.V press release said.

Not all of the region was affected by the pandemic, the statement added – beer volume even recovered ahead of 2019 in some markets within Asia-Pacific, such as in Singapore, South Korea, and Laos.

Elsewhere, Carlsberg Group noted in its global report that the beer markets in Laos, Vietnam, Malaysia, and Singapore had declined for them due to restrictions and lockdowns, although it has not yet revealed sales figures for the period.

According to Vietnam’s Ministry of Industry and Trade, the index of industrial production of the beverage industry in September 2021 sharply decreased by 34.3 per cent on-year. In general, in the first nine months of 2021, the sector decreased slightly by 4.2 per cent over the same period last year.