Brewing giant thirsty for investment options

The maker of the popular Budweiser brand is prepared to pour capital into tapping the nation’s beer trade

ABII CEO and chairman Steve Burrows wrote in a letter to the Ministry of Planning and Investment (MPI) that he planned to visit Hanoi earlier this week.
“The purpose of my visit to Vietnam is to meet with senior government and industry officials to discuss the future of the beer industry in Vietnam and how Anheuser-Busch can share with HABECO [Hanoi Brewery Corporation] and SABECO [Saigon Brewery Corporation] our experience in management, marketing, technology transfer and other disciplines,” the letter stated.
“We would also like to discuss how we could cooperate with these two brewers to deal with the future challenges of increased competition, on both domestic and international levels, and to develop the popularity of their brands in Vietnam and the region,” it continued.
Burrows stated that ABII saw the future of Vietnam’s brewing industry as very dynamic and believed that it could play a positive role in the growth of the industry.
An expert from the MPI’s Foreign Investment Agency said ABII was scheduled to meet HABECO executives during the April trip, while a meeting with SABECO leaders was slated for May “if things are convenient and the Vietnamese government supports the meeting”.
He said that despite being the largest brewer in the world, ABII had not extended operations to Vietnam and its ASEAN neighbours. However, ABII’s Budweiser trademark has been registered in Vietnam since 2000.
He added that ABII executives had actively supported Vietnam’s negotiations for the US-Vietnam Bilateral Trade Agreement and WTO accession.
“ABII is interested in acquiring a minor share in HABECO or SABECO or going into a joint venture with one of the two corporations,” he revealed.
“[ABII] also wishes to seek any suitable cooperation modality and does not plan to hold a major share in any joint venture it is to develop [in Vietnam],” the expert said, adding that ABII currently claimed only a 9 per cent stake in Tsingtao, the largest brewer in China. This stake is expected to be increased to 27 per cent by 2007.
The ABII CEO visited Vietnam in April 2002 and was received by government officials, who expressed willingness to see the world’s number one brewer operate in the country.
At that time, ABII stated that it wished to cooperate with a domestic brewer, specifically Saigon Beer, to promote Vietnamese beer brands. However, the process was delayed due to a reshuffle in the management of Saigon Beer.
ABII currently claims ownership of 33 famous brands, including the best-selling Budweiser and Budlight. In 2002, ABII’s sales amounted to 150 million hectolitres, turning over $15.6 billion and generating a profit of $2.9 billion. Last year, the brewer reported total sales of $16.3 billion.
ABII’s most successful joint ventures include Grupo Modelo, in which the US brewer holds a 50 per cent stake. The owner of the Corona brand claims 57 per cent of beer market share in Mexico, the fifth largest beer market in the world.
The corporation’s second most lucrative joint venture is the Chinese Tsingtao brand, which takes holds 13 per cent of the Chinese market and is the largest beer manufacturer in the world today.