E-Malt. E-Malt.com News article: Vietnam: Distributor of Heineken and other import beers beats Sabeco and Habeco in terms of pretax profit

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E-Malt.com News article: Vietnam: Distributor of Heineken and other import beers beats Sabeco and Habeco in terms of pretax profit
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Sabeco and Habeco, the two largest Vietnamese breweries, made VND5.3 trillion in pretax profit in 2014. However, the figure was still far below that earned by VBL, the distributor of Heineken, Tiger and Biere-Larue, VietNamNet Bridge reported on November 29.

The Vietnamese beer market is fertile land for beer manufacturers. According to the Vietnam Beverage Association (VBA), Vietnam consumed 3.1 billion litres of beer in 2014, worth $4.56 billion.

The domestic beer market is dominated by three names – Sabeco, a 100 percent Vietnamese owned enterprise which owns Sai Gon Beer and 333 brands; Habeco which owns Ha Noi Beer; and VBL which distributes foreign branded products.

Sabeco has been leading the domestic market for many years. With revenue of VND30 trillion in 2014, it could not be outstripped by any other manufacturer. The company made a high jump in the last four years with the double growth rate.

Euromonitor, in its report released in 2014, put Sabeco on the first position in the list of the breweries with the market share of 46 percent.

An analyst noted that Sabeco enjoys many great advantages. First, it sells products with prices affordable to the majority of Vietnamese and the taste suitable to the majority of consumers in the south. If compared with Habeco, whose products are dominant in the northern market, Sabeco, which is more popular in the south, has a larger market where consumers are more willing to pay for beer.

Sabeco is the manufacturer which has the highest turnover, but it is VBL, a joint venture between SATRA, the Saigon Trade Corporation and Heineken Asia Pacific, which makes the biggest profit, though its turnover is lower than Sabeco’s.

Focusing on providing foreign branded beer products such as Heineken, Tiger and Biere-Larue, VBL’s turnover in 2014 was the second biggest in the market, which was equal to 2/3 of Sabeco’s, but the profit was much higher than Sabeco’s.

Sabeco’s last year made a profit of VND3.9 trillion, much lower than that earned by VBL. And even the profit of Sabeco and Habeco, the two Vietnamese biggest breweries, in total was still lower than that of the distributor of foreign branded products.

The figures show that the profit margin in the sales of foreign products is far more attractive than Vietnamese.

The analyst noted Vietnamese breweries cannot make fatter profits than foreign ones despite the larger market shares they are holding because Vietnamese manufacturers target common people and sell products at reasonable prices, while foreign ones target high income earners, who are willing to pay high for high-end products and stay unhurt from any economic crisis.

02 December, 2015

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