Foreign firms eye Vietnam’s state brewers
BEER is Vietnam’s tipple of choice and now its cash-strapped government is drawing on the nation’s penchant for lager to raise billions of dollars by selling stakes in state-owned brewers.
The unprecedented divestments in two state crown jewels, the makers of the much-glugged Saigon and Hanoi beers, are expected to net as much as US$2.2 billion.
The sale comes as part of longpromised reforms to privatise bloated state firms, which official figures show contributed about one-third of the country’s GDP last year. It is hoped the reforms will set the communist country back on track to meet its ambitious economic targets and jumpstart growth which has slowed this year.
For Vietnam’s government, beer is a logical place to start. With a population of 93 million people, the country PXP Vietnam Asset Management is one of Asia’s leading swillers of beer.
Vietnamese consumed more than 3 billion litres of the cold stuff last year, according to Euromonitor marketing firm. That thirst has piqued interest from foreign brewers, eager to tap growth markets at a time when sales in many developed markets in Asia are forecast to plateau.
“Vietnam has one of the fastestgrowing beer consumption markets in the world, and that’s obviously an appeal,” said Kevin Snowball, CEO of PXP Vietnam Asset Management in Ho Chi Minh City. The government said this month the two companies, Habeco and Sabeco, would be listed in the first three months of 2017 and would be open to local or foreign bidders.
Heineken already has about 17 percent of the market, competing with players like Carlsberg and Sapporo. Reports say Thailand’s ThaiBev and Singha Beer may now be ready enter the fray too.
But the sales could instantly transform a foreign buyer into a top brewer: Sabeco enjoys about 45pc market share, while Habeco has 17pc, according to Euromonitor. The government says it will sell its 90pc stake of Saigon Beer Alcohol Beverage Corp for $1.8 billion, and its 82pc stake in the Hanoi Beer Alcohol and Beverage Joint Stock Corp for $400 million. –
‘Vietnam has one of the fastest-growing beer consumption markets. ’