HEINEKEN Vietnam hit with anti-competitive accusations

October 29, 2020 | 17:54
(0) user say
As beer is one of the most-consumed alcoholic beverages in Vietnam, local and foreign beermakers and their distributors are fiercely competing to dominate the market.
heineken vietnam hit with anti competitive accusations
HEINEKEN has been accused of forcing distributor agents not to sell other beer brands (Illustration photo)

A recent alleged proclamation by HEINEKEN Vietnam rocked the local beverage industry as the company was reported to have pressed local distribution agents to focus their sales solely on this one brand of beer. According to some of these beer sellers, the company threatened to cut their monthly support if they continue to sell other brands.

Following the accusations, the Ministry of Industry and Trade (MoIT) has instructed affected businesses to file an official complaint.

The MoIT’s Vietnam Competition and Consumer Protection Authority (VCCA), meanwhile, confirmed that the allegations that HEINEKEN Vietnam’s sales policy includes excluding the sale of other brands could be a violation of the Law on Competition.

Talking to VIR, the VCCA's deputy director Trinh Anh Tuan said that currently, his agency is “not working with HEINEKEN” but had already had a meeting with affected businesses to guide them in filing legal complaints.

According to Tuan, “there is no initial assessment” of the impact as his agency is still waiting for related businesses to “collect documents and evidence” for consideration.

Concurrently, the VCCA is actively coordinating with related parties to collect more information about the case. Should any violation of the Law on Competition be uncovered, the department will handle and publish the results according to the current regulations.

"HEINEKEN Vietnam is committed to conducting business with integrity and in compliance with the local laws and regulations. We do not have a policy prohibiting our distributors from distributing other brewers’ products. We take seriously the allegations in the article and will seek to clarify the origins and nature of these claims in collaboration with relevant authorities," stated HEINEKEN Vietnam in its response to VIR's queries.

Currently, the Vietnamese beer market is crowded with competition, including popular brands like Saigon, 333, Heineken, Tiger, and Hanoi Beer. Many foreign companies are also looking to penetrate the high- and mid-end market segments.

One of the methods to secure market shares is by paying commission to agents to keep their distribution channels while preventing the entry of other brewers into their dominant regions.

However, to achieve long-term success and a strong foothold in the market, beer businesses must satisfy the needs and tastebuds of their target customers, while at the same time, having the right strategy to make the best use of resources and the company’s potential.

According to market researcher Euromonitor, Vietnam is the third-largest beer consumer in Asia, after China, and Japan. Beer sales in Vietnam rose 6.6 per cent for six consecutive years, far exceeding the global growth rate of 0.2 per cent. Meanwhile, beer accounts for 95 per cent of the total alcohol consumption in the country.

By Van Nguyen

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional