Reuters has quoted its sources as reporting that the biggest brewery manufacturer is moving ahead with its plan to march towards Vietnam the next year end. It plans to set up a factory there to conquer the biggest and fastest growing market in Asia.

Nguyen Van Viet, Chair of the Vietnam Beer Alcohol Beverage Association (VBA), has noted that the increasingly high average income and the open policy pursued by Vietnam after its admission to WTO have paved the way for foreign brewery manufacturers to penetrate the Vietnamese market. This has created a cutthroat competition among the manufacturers.

“Their (AB Inbev) presence in Vietnam would make the current hot market become hotter,” said Phan Dang Tuat, Chair of Sabeco, the manufacturer that holds the biggest market share in Vietnam.

Another manufacturer has commented that the presence of AB Inbev would affect everyone, and that no one can stay unconcerned with the biggest manufacturer in the world. 

“It is very likely that they (AB Inbev) would focus on competing in the high-end and luxurious products,” he said. “Everyone, no matter they are domestic or foreign, would be the rivals of AB Inbev.”

“I am sure that all the brewery manufacturers in Vietnam now have to strain every nerve to work out on the plans to compete with AB Inbev, the owner of so many well-known brands namely Budweiser, Corona, Stella Artois, Beck's and Brahma,” he added.

However, Viet from VBA thinks that it would be not easy for the biggest manufacturer to succeed in Vietnam. 

“Many big guys once arrived in Vietnam, but then left because they could not develop here,” Viet said, adding that foreign groups need to take cautious steps to penetrate the Vietnamese market, the place where it’s difficult to make fat profit.

While Reuters quoted a senior executive of AB Inbev as saying that the brewery manufacturer has obtained the license for land use right in Vietnam, a senior official of the Ministry of Planning and Investment said: “The licensing has been decentralized to local authorities. But we have not received any reports from the localities about the project.”

However, the official said that investors sometimes try to save the time by both applying for the investment registration certificates and asking for land use right at the same time.

Vietnam is the third biggest beer consumer in Asia, just after Japan and China. The Vietnamese beer consumption has increased by 200 percent over the last 10 years to 3 billion liters by 2012. 

A report of Euromonitor showed that 80 percent of the Vietnamese beer market has been controlled by three biggest manufacturers, including Sabeco, Habeco and VBL – the owner of Heineken and Tiger brand products.

The domestic fast growing market explains why more and more foreign manufacturers attempt to penetrate the market. Carlsberg from Denmark has expressed its intention to increase its ownership ratio at Habeco to 30 percent after taken over the Hue city Brewery Company.

Vietnamnet