Local beer and beverage products will face fierce competition if thecountry does away with the import tax for beer and beverage productsthis year, which it must do in order to join the Trans-PacificPartnership (TPP).
The current tax rate is 50 percent for beer and alcohol and 30 percent for non-alcoholic beverages such as juice and soda.
Whilejoining the TPP would give Vietnam the chance to attract moreinvestment, it would also pose a significant challenge, said Luong HoangThai, head of the Ministry of Industry and Trade's MultilateralCommercial Department.
Many TPP member countries such asthe US , Japan , Canada , Mexico and Chile haveadvantages in exporting beverages, so without an import tax, localproducts might not be able to compete.
Two local companies,the Sai Gon Beer Corporation (Sabeco) and Hanoi Beer Company (Habeco),account for two-thirds of the local beer market. But they might bethreatened by cheaper imports of popular foreign brands like Sapporofrom Japan and ABInBev from the US.
The mainreason people stick to local brews is because they are cheap and ofdecent quality, Thai said, warning that when living standards inevitablyimproved, many people would shift to foreign beers – especially if theywere sold at cheaper prices.
Meanwhile, global beveragefirms Pepsi and Coca-Cola have dominated the local non-alcoholicbeverage market. Tan Hiep Phat is the only domestic beverage producerthat can stand up to their market power.
According to theVietnam Alcohol, Beer and Beverage Association, Vietnamese consumersdrank 2.38 billion litres of beer last year, 8 percent higher than 2011,and 4.22 billion litres of non-alcoholic beverages, a 9 percentincrease.
Those figures reveal Vietnam 's strongpotential as a market for alcohol, beer and other beverages, Thai said.He recommended local firms improve the quality of their products and cutprices to hang onto their market share.
Additionally,local firms should study demand for alcohol, beer and beverages in otherTPP countries and seek to expand their markets there, he said-VNA
The current tax rate is 50 percent for beer and alcohol and 30 percent for non-alcoholic beverages such as juice and soda.
Whilejoining the TPP would give Vietnam the chance to attract moreinvestment, it would also pose a significant challenge, said Luong HoangThai, head of the Ministry of Industry and Trade's MultilateralCommercial Department.
Many TPP member countries such asthe US , Japan , Canada , Mexico and Chile haveadvantages in exporting beverages, so without an import tax, localproducts might not be able to compete.
Two local companies,the Sai Gon Beer Corporation (Sabeco) and Hanoi Beer Company (Habeco),account for two-thirds of the local beer market. But they might bethreatened by cheaper imports of popular foreign brands like Sapporofrom Japan and ABInBev from the US.
The mainreason people stick to local brews is because they are cheap and ofdecent quality, Thai said, warning that when living standards inevitablyimproved, many people would shift to foreign beers – especially if theywere sold at cheaper prices.
Meanwhile, global beveragefirms Pepsi and Coca-Cola have dominated the local non-alcoholicbeverage market. Tan Hiep Phat is the only domestic beverage producerthat can stand up to their market power.
According to theVietnam Alcohol, Beer and Beverage Association, Vietnamese consumersdrank 2.38 billion litres of beer last year, 8 percent higher than 2011,and 4.22 billion litres of non-alcoholic beverages, a 9 percentincrease.
Those figures reveal Vietnam 's strongpotential as a market for alcohol, beer and other beverages, Thai said.He recommended local firms improve the quality of their products and cutprices to hang onto their market share.
Additionally,local firms should study demand for alcohol, beer and beverages in otherTPP countries and seek to expand their markets there, he said-VNA
