Stringent drink-driving laws and touch economic conditions continue to depress the Vietnamese beer sector

Vietnam’s beer production declined by 4% year-on-year in the first eight months of 2024 as breweries grappled with falling profits, according to industry sources. Nguyen Van Viet, chairman of the Vietnam Beer – Alcohol – Beverage Association, attributed the downturn to the impact of stringent enforcement of drink-driving regulations and persistent economic challenges.

According to Viet, the disappointing results were part of an ongoing trend which has seen some of the country’s large breweries announce 6-12% annual declines in revenues and profits over the past two years.

For the first half of the year, Dutch brewing giant Heineken reported a global beer production decrease of 4.7%, primarily driven by poor performance in the Vietnam and Nigeria markets. The company also announced the closure of its factory in Vietnam’s Quang Nam Province at the end of June.

Saigon Beer – Alcohol – Beverage Corporation (Sabeco), another leading Vietnamese brewery, has said that while its profits slightly increased in the first half of the year, it is expected them to decline in the second half.

Saigon-Western Beer experienced an 18% year-on-year drop in profits, and Saigon-Phu Tho Beer reported a loss of VND1 billion (USD40,700) compared to a profit of VND260 million in the same period last year.

At a recent press conference, Ly Kim Chi, chairwoman of the Ho Chi Minh City Food and Foodstuff Association, attributed the decrease in beverage consumption, including beer and liquors, to government regulations and consumers tightening their budgets. Beverage firms are also dealing with rising costs and outdated production processes, making it difficult to remain competitive.

She emphasised the need for the beer industry to develop new products that better align with modern consumer trends, and to upgrade their technologies to improve performance.