Battleground for brewers
Ho Chi Minh called alcohol a poison peddled by French imperialists. Half a century later, in the Vietnamese city that bears the revolutionary founder’s name, young women in short skirts haul cases of Tiger Beer and buckets of ice to wooden tables crowded with young men.
“Drinking beer is essential in Vietnam,” shouts Nguyen Nhat Truong, a 26-year-old researcher, over techno music. He and his friends are regulars at “123-Zo” — an outdoor eatery in suburban Ho Chi Minh City named after a regional refrain for “bottoms up!” Here glass-mugs of lager cost less than 50 cents. “We have a lot of free time and there isn’t a lot of other entertainment, so we drink beer.”
Vietnam, where a beer-swilling culture is stoking concern about binge-drinking, will be “the next key battleground for brewers,” market researcher Euromonitor International said in a report this month. The planned sale of the government’s majority stakes in the nation’s two largest domestic beer companies leaves “wide open” the door for foreign rivals, it said.
An expanding Vietnamese middle class and youthful population helped drive a 300-per-cent surge in beer demand since 2002, according to Euromonitor, which estimates the market was worth 147.2 trillion dong ($8 billion) in 2016. It predicts per-capita consumption will reach 40.6 litres this year, making Vietnam the biggest consumer of the amber fluid in Southeast Asia.
Heineken, Anheuser-Busch InBev and Japan’s Asahi Group Holdings and Kirin Holdings are among about half a dozen foreign companies that registered interest in a Sabeco stake, its former chief executive officer Le Hong Xanh said Thursday.
The Ministry of Industry and Trade valued its 89.59-per-cent share of the nation’s top beer-maker, also known as Saigon Beer Alcohol Beverage Corp., at $2.3 billion last August. The government’s 82-percent holding in Habeco, or Hanoi Beer Alcohol Beverage Corp., was worth $508 million.
It wasn’t always like this. Revolutionary Minh criticized French colonizers’ efforts to “weaken our race” with alcohol in Vietnam’s 1945 Declaration of Independence. Now, the country’s communist leaders see the potential to capitalize on the popularity of booze. At the same time, officials are recognizing the trade-off with public health.
About a third of men and two-thirds of women in Vietnam are lifetime alcohol abstainers, according to the World Health Organization. The men who do drink, tend to drink a lot, and 8.7 per cent suffer some form of alcohol dependence or disorders, compared with 4.6 per cent across the Western Pacific region.
The government is now trying to slow the liquor flow. A special consumption tax aims to increase the excise tax rate on beer annually to reach 65 per cent in 2018. The National Assembly is considering proposals to turn off beer taps during lunch hours and the late evening. It’s also weighing whether to prohibit the sale of alcohol to pregnant women and to ban government employees from drinking during work hours.
“When we drink beer, we feel relaxed,” said loan officer Nguyen Nam, 27. “I can still work in the afternoon even though I am a little bit tipsy, but some people need naps.”