Brewer Habeco misses 2017 revenue target despite Vietnam's insatiable thirst for beer
Vietnam has been viewed as a hotspot for beer sales in recent years as disposable incomes increased and consumers continued to splash the cash on booze despite increases in the special consumption tax.
However, the growing presence and popularity of international brands has hampered the ability of Habeco and indeed the largest domestic firm, Saigon Alcohol Beer and Beverage Corporation (Sabeco), to retain market share.
Habeco’s majority owner remains, for now, Vietnam’s Ministry of Industry and Trade.
Among the major international brands enjoying success in the country are Heineken, Carlsberg and Sapporo, which continue to expand their share of the 147.2 trillion dong (US$6.5bn) market.
According to Habeco director general Ngo Que Lam, 2017 revenues totalled 7.8 trillion dong (US$311.2m), falling far short of its stated ambition to hit 8.8 trillion dong. It was also below 2016’s 8.1 trillion dong.
He added, the firm aimed to earn 8.3 trillion dong (US$332m) in turnover and 955.4 billion dong (US$83.2m) in pre-tax profit in 2018, an increase of 6.7% and 0.3% respectively.
Meanwhile Habeco will list 231.8 million shares, equivalent to the total listing value of about 2.32 trillion dong (US$103m), on the Ho Chi Minh Stock Exchange this Friday, January 19.
It currently trades on the Unlisted Public Company Market (UPCoM), which is under the management of the Hanoi Stock Exchange, but believes the switch will help it gain increased investment.
The move comes amid speculation that Carlsberg, which already owns 17.3% of shares in Habeco, is about to significantly increase its stake after years of discussions.
The government said last month it expects a stake sale in Habeco to be completed in the first quarter of this year, and follows the announcement that ThaiBev’s associated company Vietnam Beverage Co. Ltd. had snapped up 53.59% of all outstanding ordinary shares in Sabeco.
Sabeco was also previously owned by Vietnam’s Ministry of Industry and Trade.
The government announced in 2016 it aimed to raise funds by “equitising” various state-owned enterprises.
Looking ahead, analysts expects Vietnam’s thirst for beer to continue this year, despite the government announcing it would impose another increase in the special consumption tax from 60 to 65%.
According to Euromonitor: “Beer is expected to register a positive total volume performance… although at a slower pace.
“The increases in the special consumption tax… are unlikely to have a significant impact on beer consumption, since beer is integral to daily life and considered a basic for most consumers.”