Domestic brewers struggle to recover amidst ongoing challenges

May 17, 2024 - 08:59
Beverage companies are currently operating at less than 80 per cent of their pre-pandemic capacity.
Outside Sabeco's plant. — Photo sabeco.com.vn

HÀ NỘI — Following a difficult 2023 with slow economic recovery and tightened regulations on alcohol restrictions during traffic, brewers’ business activities have improved in the first quarter of the year.

Saigon Beer-Alcohol-Beverage Corporation (Sabeco) reported a net revenue of nearly VNĐ7.2 trillion (US$282.2 million), marking a 16 per cent growth from the previous year.

The gain can be attributed to higher consumption and price increases last year. The company achieved a profit of over VNĐ1 trillion, a modest 2 per cent increase from the same period.

Similarly, Sai Gon - Mien Trung Beer JSC recorded a net revenue of over VNĐ327 billion, a significant increase of 29 per cent year-on-year. The growth was driven by an increase of over 7 million litres in consumption.

After subtracting costs of good sold and expenses, the company's profit before tax amounted to nearly VNĐ30 billion, an impressive 49 per cent increase.

Hanoi Liquor and Beverage JSC (Halico), the owner of Hanoi Vodka, said that its profit after tax reached VNĐ465 million. This marked the brewer’s first profitable year after eight consecutive years of losses.

In 2024, Sabeco's leadership aims to prioritise brand building and market development. The company will focus on strategies for brand, product and distribution, aligning with consumer trends.

It will also enhance the distribution system, improve product quality through research and development and strengthen the supply chain.

Additionally, Sabeco plans to expand into modern trade and online sales channels, while emphasising take-out and on-premise consumption.

Other beer producers are also aggressively targeting the retail consumption channel to boost business efficiency. They are establishing direct distribution to stores and agents, providing greater benefits to traditional distributors.

In collaboration with retailers, most beer companies are launching captivating promotional programmes in supermarkets and retail outlets.

Meanwhile, Heineken Vietnam is intensifying its marketing efforts for non-alcoholic beer, leveraging the participation of celebrities, driver communities and automotive enthusiasts.

The brand is also expanding its "0-degree stations" concept in select highway rest stops and high-traffic areas to widen the reach of this product line.

According to the Vietnam Beer - Alcohol - Beverage Association (VBA), beverage companies are currently operating at less than 80 per cent of their pre-pandemic capacity.

In light of this, the VBA recommends extending the deadline for increasing special consumption taxes and maintaining a stable tax policy for the beverage industry, particularly for beer and alcohol companies.

There is also a need for supportive policies to help businesses overcome immediate challenges, recover and foster production growth, the VBA added. — VNS

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