The beer industry, along with the retail and restaurant sectors, recorded a 20% decrease in revenue and profits in 2023 due to alcohol concentration control policies.
This information was shared by the Vietnam Beer, Wine and Beverage Association (VBA) at a conference on the afternoon of March 15th. According to the association, the policy of controlling alcohol content is one of the reasons for the sharp decline in beer consumption, especially in restaurants and eateries.
According to estimates from this association, the beer industry saw an 11% decrease in revenue and a 23% decrease in pre-tax profit in 2023. Prior to that, in 2022, the industry also experienced negative growth of 7%.
For example, the profits of the two "giants" in the beer industry fell sharply in 2023. According to the business results of Saigon Beer, Alcohol and Beverage Joint Stock Corporation ( Sabeco ), after-tax profit was approximately VND 4,255 billion, a decrease of 23%. Excluding the peak of the pandemic in 2021, this figure hit its lowest point since 2016.
Similarly, last year's profit of Hanoi Beer, Alcohol and Beverage Joint Stock Corporation ( Habeco ) decreased by 30% compared to 2022, to 355 billion VND.
The Vietnam Beer Association (VBA) stated that businesses support the policy of controlling alcohol levels, but an absolute ban would affect production and the supply chain of the industry. "Many restaurants and tourist areas are experiencing a lack of customers and are unable to do business, leading to a decrease in labor, revenue, profits, and budgets," a VBA representative said.
Mr. Nguyen Van Viet, President of the VBA, speaks at the conference on the afternoon of March 15. Photo: VBA
Besides the alcohol control policy, Mr. Nguyen Duy Hung, Vice Chairman of the VBA, said that the industry is also affected by people tightening their spending after the Covid-19 pandemic. The price of raw materials (malt, rice, cans) has increased by 20-40%, causing production costs to escalate. This forces them to raise selling prices, and consumers have to bear this increased cost.
However, according to Mr. Dau Anh Tuan, Deputy Secretary General of the Vietnam Chamber of Commerce and Industry (VCCI), the beverage industry is also affected by policy changes, such as excise tax.
According to the draft Law on Special Consumption Tax (amended), which the Ministry of Finance has been seeking opinions on since last year, the tax on alcoholic beverages (beer, wine) may increase to control consumption behavior. Currently, the special consumption tax rate for beer is 65%, and for wine it ranges from 35-65% depending on whether the alcohol content is above or below 20 degrees.
Representatives from the VBA stated that increasing taxes is necessary, but proposed a roadmap for amending the Special Consumption Tax Law from 2025 onwards to create conditions to help businesses recover.
Meanwhile, businesses are petitioning the government not to increase the excise tax on this product, fearing significant economic damage to the industry and a decrease in budget revenue. They argue that increasing the tax and adjusting selling prices is not an effective tool to change consumer habits.
Instead, the government needs policies that encourage businesses to innovate technologically, create suitable products, and benefit users and the economy.
Phuong Dung
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