Fierce competition in the Vietnamese beer market

Viet Nam’s beer market is set for an eventful year as new brands hit the domestic market while beer producers in Viet Nam invest in expanding their market share.

Construction of a plant producing Kronenbourg beer is planned to start in March in Long An Province. The plant, a joint venture between Viet Nam Tobacco Corporation (Vinataba) and Scottish and Newcastle Group, will be able to produce 150 million litres each year. Each partner holds half of the plant’s total investment of 75mio US$.

Patrick Dougan, general managing director of Viet Nam Kronenbourg and development director of the company’s Asia-Pacific arm, said Scottish and Newcastle Group has carefully carried out market research in Viet Nam.
The domestic beer market has an annual growth rate between 9 to 11% and already enjoys fierce competition with many well-known beer brands, including Sai Gon, Ha Noi, Tiger and Heineken, said Dougan.

Viet Nam has 300 plants producing beer and alcohol products. Some of them have boosted expansion of production, including Sai Gon Beer, Alcohol and Beverage Corporation (Sabeco) and Viet Nam Beer Company.

Sabeco has 10 projects on expanding production, boosting co-operation in production and building new factories in provinces and cities, including Cu Chi District - HCM City, Vinh Long Province and Dung Quat - Quang Ngai Province.
The company expects to increase its total annual capacity to 800 million litres of beer in 2009. Sabeco has recently launched the Irish black beer brand Guiness with production of the new brand set for Sabeco’s factory in Binh Duong Province from June, said a Sabeco official.
In addition to buying foreign beer brand franchises, Sabeco has co-operated with Asahi, a Japanese leading beverage producer.

Asia Pacific Breweries Limited (APB) has registered to increase its HCM City-based Viet Nam Beer Factory’s total annual capacity of beer from 150 million litres to 230 million litres.
The APB is carrying out its plan on expanding production by co-operating with Quy Nhon Beer Company to boost the company’s annual capacity from 20 million litres to 100 million litres and to make beer for the region with Quang Nam Beer Company, which has an annual capacity of 25 million litres.
Last October, APB took control of beer factories in Da Nang and Tien Giang and trade marks of BGI, Larue, Larue Export and Larue Superior, owned by Foster’s Group in Viet Nam under an agreement signed between Foster’s and APB two months ago. Under the agreement, APB is solely responsible for producing, packaging, distributing and trading of Foster’s Lager Beer in Viet Nam.

Source: VNS