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Vietnam Primed to Share More Beers With Neighbors in Southeast Asia

Output set to rise up to 25% as thirst for Vietnam’s beer tipped to rise at home and abroad.

Vietnam, already one of Asia’s largest beer consumers, is seeking to boost its beer output over the next several years to meet an expected rise in demand at home and abroad.

The country aims to raise beer output by 18% to 25%, up from 3.4 billion liters in 2015 to between 4 billion and 4.25 billion liters by 2020, the Vietnam Beer Alcohol Beverage Association said in a statement Tuesday.

The planned expansion isn't just aimed at meeting rising domestic demand. Vietnam is also eager to boost exports to other Southeast Asian countries after the Asean Economic Community, an economic bloc of 10 countries, came into effect last week, said Phan Chi Dung, head of the Ministry of Industry and Trade’s light-industry department.

“The Asean Economic Community will boost trade and allow freer flows of labor and services, so it will be an opportunity for Vietnamese beer to go to a wider market,” Mr. Dung said.

With a population of more than 90 million and a beer-drinking culture, Vietnam has been attractive to foreign investors because of perceived growth prospects in its beer market. In May, Belgium-based Anheuser-Busch InBev NV opened its first brewery in southern Vietnam to produce Budweiser and Beck’s. Other foreign brewers that have a footprint in Vietnam include Denmark’s Carlsberg Group and the U.K.’s SABMiller PLC.

The targeted expansion in Vietnam’s beer output will include both domestic and foreign brands, said Phan Dang Tuat, head of the Ministry of Industry and Trade’s enterprise reform commission and a former deputy chairman of the beer association.

Mr. Tuat said his ministry is planning an international investment conference in Hanoi to encourage foreign investors and investment funds to buy stakes in local firms, including in breweries.

Last month, Thailand’s Singha Group made one of the largest investments in Vietnam, buying stakes valued at $1.1 billion in certain subsidiaries of Vietnam’s Masan Group, including a 25% stake in Masan Consumer Holdings and a 33.3% stake in Masan Brewery, the companies said in a joint statement at the time. Masan Brewery is a new local player, opening its first plant in southern Vietnam in late 2015, with a capacity of 100 million liters a year.

Mr. Tuat said the long-delayed plan to sell a stake in the country’s largest brewer, Sabeco, is still alive, however it isn’t yet clear when the government will make a final decision.

Vietnamese officials said several foreign brewers have made approaches to buy a stake in Sabeco, formally known as Saigon Beer Alcohol Beverage Corp. It is 89% state-owned and controls about 45% of Vietnam’s beer market, selling brands including 333 and Saigon. Thai Beverage PCL, Heineken NV and SABMiller have shown interest in buying Sabeco, the officials said.

8 Jan. 2016

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