Saturday 1 October 2016

Big brewers on a mission to conquer beer market in Vietnam

Mai Ngoc Chau

Published 30/08/2016 | 02:30

Customers sit eating and drinking over crates featuring branding for Heineken and Tiger beers at an outdoor restaurant in the Old Quarter of the northern city of Hanoi
Customers sit eating and drinking over crates featuring branding for Heineken and Tiger beers at an outdoor restaurant in the Old Quarter of the northern city of Hanoi

Heineken's expansion of its production in Vietnam by taking over a brewery from rival Carlsberg highlights growing interest by global beer brands to quench the thirst of about 70 million locals in one of the world's fastest- growing economies.

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With a thriving street-side cafe and bar culture, young population and rising middle class, Vietnam is luring brewers such as Heineken, Thai Beverage and Asahi Group Holdings to expand.

Interest is also being piqued by the government's plans to offload lucrative assets, with Carlsberg in line to more than double its stake in state-run Hanoi Beer Alcohol Beverage, or Habeco.

"The Vietnamese beer market is of great interest to other international players," said Dominic Scriven, chairman of Dragon Capital.

Beer consumption in the Southeast Asian country jumped about 40pc in 2015 from 2010, according to the Vietnam Beer Alcohol Beverage Association. Vietnamese are expected to drink more than 4.04 billion litres of beer this year, the most in the region and up from 3.88 billion litres in 2015, according to Euromonitor International.

Economists predict Vietnam will be among the world's fastest-growing economies in 2016 as it benefits from a manufacturing industry that's grown in importance over the years.

The number of citizens of legal drinking age, 18 and above, is expected to rise to 72.4 million by 2021 from 68.7 million now, according to Euromonitor.

"The growth of the beer market in Vietnam over the past few years is nothing short of amazing, and it shows no sign of slowing down," said Andy Ho, managing director of VinaCapital in Ho Chi Minh City.

Heineken acquired Carlsberg Vietnam Brewery-Vung Tau in the south Vietnam port city last month. Carlsberg chief executive officer Cees't Hart said the sale of the facility would allow the Danish brewer to concentrate on its existing territory in the northern part of the country. (Bloomberg)

Irish Independent

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