Heineken's profits in Vietnam increase again, is the beer industry over the difficult period?

Business results of beer companies recorded revenue growth thanks to the recovery of domestic consumption demand. However, the industry is still forecast to face many challenges.

According to Mirae Asset, beer consumption in Vietnam is high, reaching about 43 liters/person/year - Illustration photo: AI

Saigon Trading Group (Satra) has just announced its consolidated financial report for 2024, recording net revenue of VND 9,038 billion, down 8% compared to 2023.

Gradually brightening again

However, after-tax profit increased sharply by 37%, to VND3,146 billion, thanks to sudden revenue from joint ventures and associates.

Profits shared from joint ventures and associates last year reached VND3,443 billion, up 24% over the same period.

Although the report did not specifically name the contributing companies, for many years Satra's main source of revenue has come from two strategic joint ventures with Heineken.

Accordingly, at Heineken Vietnam Brewery Company Limited and Heineken Vietnam Beer and Beverage Company Limited, Satra currently owns 40% of the capital, the rest is foreign.

These two companies are responsible for producing and distributing Heineken beer products in the Vietnamese market.

With a large contribution, the profit recovery from Heineken Vietnam is considered an important factor in driving up Satra's business results.

This improvement is especially notable when in 2023, Satra's joint venture and association profits fell by nearly 47% to VND2,733 billion, causing after-tax profit that year to fall to VND2,295 billion - only half of the VND5,086 billion in 2022.

Even in the first 6 months of 2024, Satra recorded a 28% decrease in profits from joint ventures compared to the same period.

The recovery of Heineken Vietnam also partly reflects the picture of the beer industry gradually brightening again after a difficult period.

4 "big guys" dominate 90% of beer industry market share

Mirae Asset Securities recently cited a Euromonitor report saying that the beer market is currently dominated by four "big guys": Heineken, Sabeco (SAB), Carlsberg and Habeco (BHN), accounting for more than 90% of the market share.

Last year, Sabeco recorded revenue of VND32,164 billion and after-tax profit of VND4,494 billion, up 5% and 6% respectively. Meanwhile, Habeco reported revenue of VND8,301 billion, up 5% and after-tax profit of VND391 billion, up 10%.

The business results of beer companies recorded revenue growth thanks to the recovery of domestic consumption demand. However, it should be noted that after-tax profit growth was uneven due to fierce competition and challenges in controlling operating costs.

According to Mirae Asset, beer consumption in Vietnam is high, reaching about 43 liters/person/year, with a compound annual growth rate (CAGR) of 4.7% in the period 2009 - 2023.

This trend is forecast to continue to increase slightly, reaching an average of 2%/year in the period 2025 - 2030 thanks to supporting factors such as economic growth, young population, urbanization and recovery of the tourism industry.

However, Mirae Asset also pointed out that Vietnamese consumers' health awareness is increasing, along with tightening regulations related to alcohol concentration.

This has boosted demand for light and non-alcoholic beer products with Heineken 0.0, Sabeco (Sagota), Budweiser Zero...

However, the consumption of non-alcoholic beer is still quite modest, accounting for just over 3% of total beer consumption. The reasons may stem from a number of factors: non-alcoholic beer has a bland taste, less attractive than traditional beer; the price is higher; some products still contain a small amount of alcohol despite being labeled "non-alcoholic", causing concerns about violating Decree 100.

Still having trouble?

In fact, the beer market still faces many long-term challenges such as high input costs, changing consumer tastes, fierce competition and the trend of increasingly tightening control over alcoholic beverages...

That is why the Vietnamese beer industry ended the first quarter of 2025 with a not-so-positive color scheme. Habeco reported a profit, Sabeco, although still leading the market, lost its growth momentum, while many small businesses reported losses.

BINH KHANH

Source: https://tuoitre.vn/loi-nhuan-heineken-o-viet-nam-tang-tro-lai-nganh-bia-lieu-da-qua-canh-kho-20250607150459753.htm