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BUSINESS REPORT

Glass half-empty PHOTO: SABECO

Revenue in the beer market stands at $1.523
billion in 2023. The market is expected to grow
With consumption down and costs rising, brewers in Vietnam are at a CAGR of 3.03 per cent annually in 2023-
improving their operations in anticipation of an eventual recovery. 2028.
Most global beer revenue is generated in the
US ($74.73 billion in 2023).
| By GIANG HOANG Per person revenue of $15.41 was generated in
Vietnam in 2023.
Volumes are expected to amount to 1.351 billion
rior to 2019, Vietnam regularly topped the first time the company has reported a liters by 2028. The beer market is expected to
the charts in beer consumption in loss since the first quarter of 2020, when post falling volumes in 2024, by 3 per cent.
P Southeast Asia and even secured talk of pandemic first emerged. In the The average volume per person is expected to
ninth place globally at one time. Recent same period last year, the company posted amount to 13.02 liters in 2023.
statements from major brewers, however, a profit of VND34.5 billion ($1.4 million). Source: Statista
acknowledge a significant decline in world- Similarly, Sabeco also saw declining
wide sales and particularly in Vietnam. business results in the first quarter of this demand and rising input costs.
year. Revenue was VND6.213 trillion ($256 On July 31, meanwhile, Heineken
CONTINUED DECLINE million), down 15 per cent compared to revised its profit forecast for 2023 down-
According to VIRAC Research’s overview the same period of 2022. Revenue from wards, citing Vietnam’s slow economic
of the beer industry in early 2023, both beer sales accounts for about 90 per cent, growth, which resulted in lower-than-
major beer players in Vietnam - the Hanoi alongside 8 per cent from raw material expected revenue in the first half of the
Beer Alcohol Beverage Corporation sales and a small percentage from other year. It anticipates growth in operational
(Habeco) and the Saigon Beer Alcohol beverages, alcohol, and other sources. How- profit after one-time payments this year
Beverage Corporation (Sabeco) - experi- ever, Sabeco is more stable than its coun- to range from 0 per cent to 4-6 per cent.
enced a substantial downturn in revenue terpart Habeco, with gross profit margins This marks a decline from its earlier pro-
and profit in the first quarter of the year. fluctuating around 30 per cent. The com- jection of 5-10 per cent. In the first half of
Ninety-eight per cent of Habeco’s total pany continues to allocate significant funds 2023, Heineken experienced a 5.6 per cent
revenue comes from the sale of goods, to sales and business management expenses. fall in beer sales compared to the previous
with the remaining 2 per cent from service At the end of the first quarter, net profit year. Despite increased revenue due to
provision. Despite the company’s efforts was VND1.004 trillion ($41.4 million), a price hikes, the company’s operational
to cut various costs, such as business man- decline of about 19 per cent. This was the profit still fell 8.8 per cent compared to
agement and sales costs, especially for third consecutive quarter of falling profits the same period last year. It attributes its
advertising, promotions, and support, a for Sabeco after peaking at VND1.793 tril- business results in Asia, particularly in
sharp increase in the price of input materials lion ($73.9 million) in the second quarter Vietnam, one of its major markets, to the
has pushed up the cost of goods sold, of last year. Sabeco attributes the lower impact of slow economic growth.
resulting in Habeco reporting an after-tax profit to intensified competition among VIRAC Research’s beer industry report
loss of VND3.7 billion ($152,545). This is beer brands, coupled with falling consumer for early 2023 indicates that Decree No.

30 | VIETNAM ECONOMIC TIMES | DECEMBER 2023 en.vneconomy.vn