Brewers vie for growth in Asia

Heineken’s expansion of its production in Vietnam by taking over a brewery from rival Carlsberg highlights growing interest by global beer brands to quench the thirst of about 70 million locals in one of the world’s fastest-growing economies.

With a thriving street-side cafe and bar culture, young population and rising middle class, Vietnam is luring brewers such as Heineken, Thai Beverage and Asahi to expand in the country. 

Interest is also being piqued by the government’s plans to offload lucrative assets, with Carlsberg in line to more than double its stake in state-run Hanoi Beer Alcohol Beverage or Habeco.

“The Vietnamese beer market is of great interest to other international players, such as those from Japan and Thailand,” said Dominic Scriven, chairman of Dragon Capital. 

“This in general is reflective of greater strategic interest across many sectors from foreign investors.”

Beer consumption in the Southeast Asian country jumped about 40% in 2015 from 2010. 

Vietnamese guzzlers are expected to consume more than 4.04 billion liters of beer this year, the most in the region and up from 3.88 billion liters in 2015, according to Euromonitor International.

Economists predict Vietnam will be among the world’s fastest-growing economies in 2016 as it benefits from a manufacturing industry that’s grown in importance over the years. 

Its citizens of legal drinking age, 18 and above, is expected to increase to 72.4 million by 2021 from 68.7 million this year, according to Euromonitor.

“The growth of the beer market in Vietnam over the past few years is nothing short of amazing, and it shows no sign of slowing down,” said Andy Ho, managing director of VinaCapital in Ho Chi Minh City.

Heineken in July acquired Carlsberg Vietnam Brewery-Vung Tau in the south Vietnam port city. 

Carlsberg chief executive Cees’t Hart said the sale of the facility would allow the Danish brewer to concentrate on its existing territory in the northern part of the country.

Amsterdam-based Heineken, the second- biggest brewer in Vietnam, has seen its shares rise 0.5% year to date, while Carlsberg, headquartered in Copenhagen, rose 2%. The Vietnam Stock Index rose 17 percent over the period.

“We have a footprint, which we would like to improve,” Mr Hart said, referring to Habeco, based in the capital Hanoi in north of Vietnam, in which Carlsberg is awaiting the government’s go-ahead for it to raise its 17% stake to 30%.


Lifestyle

Halloween has really upped the ante in recent years here, hasn’t it?We have moved on considerably since the days of a bin liner fashioned with holes for arms and necks

Sandhoppers for breakfast? It’s just not cricketCrickets for lunch anyone? Time - is running out - to get over our western food prejudices

Why did the Neanderthals go extinct?, asks Richard CollinsDid ear and chest infections wipe out our neanderthal ancestors?

Corkbeg Island near the mouth of Cork Harbour is today an industrial location with Ireland’s only oil refinery whose silver cylinders dominate the low-lying island like giant mugs, writes Dan McCarthy. Islands of Ireland: 'Tanks' for the memories Corkbeg

More From The Irish Examiner