VietNamNet Bridge - Vietnam’s beer market has seen exceptional growth in the past years with major brewers sharply expanding production.

The Vietnam Brewery Limited (VBL), brewer of diverse beer brands such as Heineken, Fosters, Tiger and Larue and member of Singapore-based APB Group Vietnam, recently proposed to boost its production to 400 million litres of beer per year, up 100 million litres against the present capacity.

VBL’s move to expand production was inevitable to meet ever-increasing marked demands, even when the business has run at its full capacity, said a Ministry of Industry and Trade (MoIT) executive.

APB Group Vietnam has been active in Vietnam since 1991 with the first brewery having an annual production capacity of 50 million litres. In 2010 total production capacity of APB Group Vietnam’s breweries reached 470 million litres per year and these breweries all run at full capacity.

Not only foreign-backed breweries reportedly hiked production, local giants Saigon Beer Alcohol Beverage Corporation (Sabeco) and Hanoi Beer Alcohol Beverage Corporation (Habeco), both sharply raised their production.

In 2010, Sabeco churned out over 1.1 million litres of beer which were almost sold out and Habeco turned out 568 million litres.

Around 2.7 billion litres of beer were sold in the domestic market in 2010, according to MoIT figures. Habeco’s chairman Nguyen Tuan Phong, however, assumed that actual sales figures might be higher at approximately 2.8 billion litres.

Reality shows that amid rapid population growth beer consumption in Vietnam jumped quickly, from 1.29 billion litres in 2003 to 1.37 billion litres in 2004, 1.5 billion litres in 2005, 1.7 billion litres in 2006, 1.9 billion litres in 2007 and over 2 billion litres in 2008.

Around two years ago, the MoIT revised its forecast, raising total beer production output locally to 2.7 billion litres, up 45 per cent over 2007’s and higher than forecast level of 2.5 billion litres which was set in 2004 when Vietnam’s beer industry general development plan was outlined.

Chief of MoIT’s Light Industry Department Phan Chi Dung said beer consumption in one Mekong Delta location averaged 10 million annually in 2004. However, beer consumption in the region augmented robustly and in 2010 Mekong Delta Bac Lieu province turned out 40 million litres per year while corresponding figures for Soc Trang province and Can Tho city also in the Mekong Delta- were 50 million and 70 million litres, respectively.

Besides, imported beer volume was also in the same position. A beer expert said around 40 million litres of beer was imported into Vietnam via official channels in 2010 and cross-border import figures were approximately 100 million litres.

Vietnam’s beer industry grows an average 9-10 per cent per year, according to a survey by Euromonitor International, a leading independent provider of business intelligence on industries.

Phan Chi Dung, however, said actual hike figures were more buoyant of 15-18 per cent per year in some recent years and the situation would linger.

Source: VIR