Vietnam looks to boost beer production

Vietnam has developed a beer-drinking culture. Source: Flickr

Vietnam, already one of Asia’s largest beer consumers, is seeking to boost its output of the beverage over the next few years to meet rising demand.

It aimed to raise output by 18 to 25 per cent, up from 3.4 billion litres last year to between 4 billion and 4.25 billion litres by 2020, the Vietnam Beer Alcohol Beverage Association said.

The planned expansion is not just aimed at meeting rising levels of thirst within the Southeast Asian state.

The association has projected production of between 4 and 4.25 billion litres of beer, 100 and 150 million litres of liquor and 8.3 and 9.2 billion litres of soft drinks by 2020.

Head of the Ministry of Industry and Trade’s light-industry department, Phan Chi Dung, said Vietnam also wanted to boost exports throughout the Asean Economic Community, which came into effect last week.

“The Asean Economic Community will boost trade and allow freer flows of labour and services, so it will be an opportunity for Vietnamese beer to go to a wider market,” Dung said.

With its population of more than 90 million, including many beer drinkers, Vietnam has been attractive to foreign investors.

In May, Belgium’s Anheuser-Busch opened a brewery in southern Vietnam to produce Budweiser and Beck’s. Denmark’s Carlsberg Group and the UK’s SABMiller also brew in the nominally communist state.

The targeted expansion in Vietnam’s beer output would include domestic and foreign drinks, said Phan Dang Tuat of the ministry.

Tuat said his ministry was organising an investment conference in Hanoi to boost funds in the drinks industry.

Last month, Thailand’s Singha Group bought stakes valued at US$1.1 billion in subsidiaries of the Vietnamese Masan Group, including a 25-per-cent stake in Masan Consumer Holdings and a 33.3-per-cent stake in Masan Brewery.

Masan opened its first brewery in southern Vietnam late last year, with a capacity of 100 million litres a year.

Tuat said Hanoi planned to sell a stake in the country’s largest brewer, Sabeco, the Saigon Beer Alcohol Beverage Corp.

Vietnamese officials said several foreign brewers had made approaches to buy a stake in Sabeco. It is 89-per-cent state-owned and controls about 45 per cent of the nation’s beer market, selling 333, Saigon and other drinks.

Thai Beverage, Heineken and SABMiller have reportedly shown an interest in buying Sabeco.

Vietnam’s beer production grew 10 per cent last year with Sabeco, the biggest player in the market, producing 1.5 billion litres.

The association said the industry accounted for around 3 per cent of Vietnam’s GDP.

Liquid imports have also increased in recent years despite rising tariffs.