VietNamNet Bridge – Foreign beer producers are flocking to Viet Nam, salivating at the potential of the market, which was last year the third largest beer consumer in all of Asia.

Workers operate a beer production line at Saigon-Dak Lak Beer Co in Buon Ma Thuot City, in the Central Highlands of Viet Nam.

The Viet Nam Beer Alcohol Beverage Association said beer consumption grew by over 8 per cent last year to 3 billion litres.

Its chairman, Nguyen Van Viet, told Viet Nam News that growth in the coming years would be 7-8 per cent.

"Compared to many countries in the region, the Vietnamese market is still promising for investors."

Not surprisingly, many of the major global beer brands like Heineken, Sapporo, and Budweiser are here, and many more plan to enter while existing players plan to expand production.

After success in China, the world's biggest beer producer, Anheuser-Busch InBev (ABI), announced plans to produce in Viet Nam, where the company predicts beer sales will rise by 10 per cent on average between 2010 and 2020.

The company told Viet Nam News that construction of a US$30 million, 10,000sq.m brewery would begin in mid-year in the southern province of Binh Duong.

The company's general director, Ricardo Vasques, said, "The capacity of this new facility will be 100 million litres per year," adding he saw "great potential in the country."

He said the new facility showed the company planned to stay long in the country because of "a friendly business environment, competitive labour force and excellent geographic positioning."

Late last year US newspaper Wall Street Journal reported that Thai Beverage PCL, owned by Thailand's billionaire Charoen Sirivadhanabhakdi, had approached the Vietnamese Government to buy a stake in the Saigon Beer Alcohol Beverage Corporation (Sabeco).

Online newspaper vnexpress.net said 10 other foreign investors, including Asahi of Japan, Heineken of the Netherlands and SAB Miller of the US, were also interested in picking up stakes in Viet Nam's biggest beer producer.

Tough competition

With the entry of many foreign companies, however, the competition is tougher than ever, putting pressure on both domestic and foreign companies to find winning strategies.

Sapporo Viet Nam boosted its capacity to meet increasing demand; Sabeco has brought out several new premium products like Saigon Gold and Saigon Special.

Others like Heineken have chosen to try and increase awareness of their brands by changing bottle shape and design.

As a newcomer, ABI has decided its products in Viet Nam will be consistently of the same quality as its global versions.

Vasques said, "The new facility will feature ABI's world-class brewing technologies.

"This production will also allow us to react to local demand more quickly, enabling us to better service our trade partners and, ultimately, consumers.

"The new facility forms part of our long-term commitment to the market in Viet Nam – a market in which we see a great deal of dynamic and potential for future growth."

VNS