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Home / Social Affairs
Vietnam beer consumption passed 4 billion-liter mark
Nguyen Tung 11:56, 2018/01/14
In 2017, beer consumption in Vietnam is estimated to be over 4 billion liters, up 6% over the last year’s figure, said in a report of the Vietnam Beer Alcohol and Beverage Association (VBA).
That said, this number is closing in the target of 4.1 billion liters by 2020 set in the master plan for the development of Vietnam’s alcohol beer and beverages sector approved by the Ministry of Industry & Trade.
 
Vietnam's beer market is estimated at US$6.5 billion, according to Euromonitor.
Vietnam's beer market is estimated at US$6.5 billion, according to Euromonitor.
 

With the current population of 93.7 million, each Vietnamese person consumed an annual average of 42 liters of beer. This consumption rate is expected to continue its growing trend following the master plan of the Ministry of Industry & Trade. Specifically, by 2035, Vietnam will produce 5.5 liters of beer with projected population at 105 million, meaning a Vietnamese person will consume around 52 billion liters per year by that time.

Despite many enterprises have been complaining about the high excise tax rate for alcohol drinks from 60% in 2017 to 65% in 2018, as the beer consumption rate is increasing, revenue and profit of brewers are on the positive trend. 

Saigon Alcohol Beer and Beverage (Sabeco), Vietnam’s largest brewer has produced more than 1.73 billion beer liters alone, up 8% and recorded after-tax profit of VND4.8 trillion (US$212 million), an increase of 4% year on year. Sabeco aims to set the target of producing over 1.8 billion liters of beer in 2018 and reaching the 2 billion-liter mark in following years. 

In particular, while the global annual beer consumption rate has been slowing down in recent years, Vietnam’s beer market has witnessed a sharp rise in contradiction. With this being said, the market for the alcoholic beverage in Vietnam has doubled growth in the past 10 years at a 6.4% per year growth rate and 5.7% for the past 5 years.

8 years ago, Vietnam ranked 8th among the Asian top highest beer consuming countries, but has climbed to the top three in 2016, in which top places belonged to Japan and China, respectively. An expanding Vietnamese middle class and youthful population helped drive a 300 percent surge in beer demand since 2002, according to Euromonitor, which estimates the market was worth 147.2 trillion dong ($6.5 billion) in 2016. 

This is seen as a decisive factor for the beer market in particular, and Vietnam’s beverage market in particular to be considered of high potential for development in the eyes of investors from local and abroad. Evidently, Thaibev of the Thai billionaire Charoen Sirivadhanabhakdi parted away with nearly US$4.8 billion to purchase 53.95% Sabeco stakes in last December. 

The move from ThaiBev indicating its strategy to get into Vietnam’s beer market as it targets to expand across Southeast Asia to diversify revenue streams. 

ThaiBev, through its Fraser and Neave Ltd. investment unit, also holds a 16 percent stake in Vietnam Dairy Products JSC, the country’s biggest dairy, and has registered to increase its holding. Another Charoen-owned company, TCC Holding Co., struck a deal to acquire Metro Cash & Carry Vietnam for about $700 million in 2015.
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