Beer industry struggles amid crackdown on drunk driving, higher costs

Nguyen Van Viet, chairman of the Vietnam Beer - Alcohol - Beverage Association, said the industry has been hit by the stringent drunk driving policies and difficulties in the economy, and this has affected the labor market and other industries that supply materials and services to beer manufacturers.

"Over the last two years large companies in the industry have seen a 6-12% annual decline in revenues and profits."

Dutch brewing giant Heineken said its global beer production fell by 4.7%, mainly due to the Vietnam and Nigeria markets. It had to shutter its factory in Quang Nam Province at the end of June.

Sabeco, another industry leader, said its profits inched up in the first half but could plummet in the second.

Other brewers also reported a fall in profits in the first half. Saigon - Western Beer saw an 18% year-on-year drop, while Saigon - Phu Tho Beer lost VND1 billion (US$40,700) as against profits of VND260 million in the same period last year.

At a press conference last Tuesday, Ly Kim Chi, chairwoman of the HCMC Food and Foodstuff Association, said consumption of beverages, including beer and liquors, has decreased due to the government’s tight regulations and consumers’ belt-tightening.

Beverage firms are dealing with rising costs and outdated production processes that make it difficult for them to be competitive, she said.

To improve performance, the beer industry needs to develop products that align with modern consumer trends and upgrade their technologies, she noted.

Viet called for policies to support the beer industry: "I support restricting drunk driving, but regulations need to be adjusted to suit Vietnam's transport system."