E-Malt.com News article: Laos: Beerlao has snapped up 99 % of its domestic market

Beerlao has snapped up 99 % of its domestic market and some international awards while forging a rarity in this impoverished remnant of the communist world — a distinctive brand name, Associated Press posted on January 15.

Probably the only Laotian product that rings bells in the region or beyond, Beerlao is also gearing up for an export drive and some international promotion, which, until now, has been largely word-of-mouth and Internet chat.

At home, Beerlao (Bia Lao in the Lao language) goes unchallenged, its golden tiger head logo far more prominent than the red star of the ruling Communist Party. The state-owned Lao Brewery Co. supports schools, health facilities and sports competitions, paying an estimated $32.5 million into state coffers this year — more than any other single enterprise.

"National pride is a big part of our success," says marketing manager Bounkanh Kounlabouth, underlining the company message: Drinking Beerlao is good for the country.

The growing number of foreign tourists — many of them young backpackers — partake, especially because a can goes for the equivalent of 56 cents at many bars and restaurants.
Watching the sun set over the Mekong River while sipping a cold Beerlao (side order of deep-fried crickets optional) has become a must-do for visitors. And travelers returning home post comments on Internet sites such as: "probably the best beer in the world," "decent beer but massively hyped up," and "when is it coming to Sydney?"

So far only 1 percent of production is exported, mainly to Cambodia, Vietnam, France, Japan, New Zealand, Australia and the United States. It also is smuggled into neighboring Thailand, which puts onerous restrictions on its import.

But Bounkanh said a factory to be built in southern Laos as an export base will double production capacity to some 63 million gallons a year.

The enterprise, which traces its origins to French colonial times, added dark brew and a light beer to its regular lager this year and went into a 50-50 joint venture with Denmark's Carlsberg Breweries, the world's No. 5 beer maker.

"Laos is developing fast and many tourists are coming to it. The time has come to offer more choices to drinkers," Carlsberg Vice President Mogens Thomsen said when the deal was sealed in October.

Smooth, golden-colored and with a bouquet of rice substituting for the more traditional barley, Beerlao has won awards in Europe, the United States and New Zealand and was voted Asia's best beer of 2004 by Time magazine.

With only 2.3 million Laotian drinkers, the domestic market is limited but growing at about 10 to 15 percent a year. Consumption is estimated at just 4 gallons per Laotian, compared with 21 gallons for Americans.

Czech brews, Bounkanh said, were Beerlao's prime inspiration, and he and several other executives spent years studying beer-making in the Czech Republic. Yeast and hops are imported from Germany and malt from Belgium and France, but the rice is Laotian.

The company realizes that Beerlao's "full taste of happiness" and the nationalist factor are not the only reasons for its success — a 40 percent tax on imported beer helps. This, however, will vanish in 2008 when Laos joins the Southeast Asian free trade zone.

Bounkanh knows imports will weaken Beerlao's grip on the market, but he hopes exports will fill the shortfall. Meanwhile, the company's modern, computerized brewery on the outskirts of the capital, Vientiane, cannot work fast enough. "Sometimes in the peak season we cannot meet the demand," Bounkanh said while savoring a glass of Beerlao. "Why is it so good? It's fresh, fresh beer. It's off the shelves in two weeks."


18 January, 2006