Except for 2021, Saigon Beer and Hanoi Beer's profits both fell to their lowest level in many years, due to the policy of strengthening alcohol concentration control.
In previous years, it was not easy for consumers to buy beer in large quantities during the Tet holiday. Supermarkets simultaneously set beer purchase quotas, and grocery stores also competed to raise prices since the 15th of the 12th lunar month. But this year, the bustling wholesale scene, the shortage of goods and the "feverish" prices no longer appeared.
This is also reflected in the business results of the two "giants" in the beer industry. Saigon Beer - Alcohol - Beverage Corporation (Sabeco - SAB) recorded a profit of VND966 billion in the last quarter of 2023, down 10% compared to the same period in 2022 and the lowest level in the past two years. For the whole year, Sabeco had about VND4,255 billion in profit after tax, down 23%. Excluding the peak of the epidemic in 2021, this figure hit its lowest point since 2016.
Sabeco’s two subsidiaries, Saigon-Hanoi Beer (BSH) and Saigon-Middle Beer (SMB), also recorded a similar situation. BSH’s profit fell 26% in 2023, while SMB’s was 17%, reaching a four-year low.
In the North, Hanoi Beer - Alcohol - Beverage Corporation (Habeco - BHN) had a profit after tax of VND 355 billion, down 30% compared to 2022. Excluding the peak of the epidemic in 2021, this is Habeco's lowest profit since 2008.
Similarly, two subsidiaries Hanoi - Hai Duong Beer (HAD) and Hanoi - Thanh Hoa Beer (THB) also saw profits fall by about half compared to 2022.
Enterprises said that the strict implementation of Decree 100 on alcohol concentration control is one of the main reasons for the decline in revenue and loss of profits. According to the Vietnam Beer - Alcohol - Beverage Association (VBA), after a long period of being affected by social distancing measures, the beer industry has had to face Decree 100 with very heavy sanctions, causing serious impacts on the production and business activities of these enterprises.
This shows that the State’s management measures to reduce the harmful effects of beer and alcohol are having a great effect. Recently, the authorities have carried out many peak campaigns to check alcohol levels. In Ho Chi Minh City alone, the city police have gone to every alley and conducted regular checks.
Sabeco and Habeco both said that Decree 100 combined with economic fluctuations has caused a decline in beer demand in 2023. To stimulate demand and cope with fierce competition, companies have had to step up promotions and discounts. Despite declining revenue, Hanoi Beer still spent more than VND140 billion on trade discounts, up 13% over the previous year. This figure for Saigon Beer decreased but was still high, around VND234 billion. In addition, Sabeco also spent more than VND2,800 billion on advertising and promotion activities.
Not only in output, the beer industry also faces difficulties due to the sharp increase in input material prices. In the near future, if the amended Law on Special Consumption Tax, which includes changes in the calculation method and adjustment of tax rates for alcohol and beer, is implemented, the situation of businesses will become even more difficult.
In a recent report, Funan Securities said that the major risk for the beer industry is that demand has not shown signs of improvement because people tend to tighten spending, especially for non-essential items such as beer and wine. For Sabeco, SSI Research forecasts a slight recovery of 3% in 2024 in consumption due to high average selling prices and Decree 100 continuing to keep consumption from returning to pre-pandemic levels.
Siddhartha
Source link
Comment (0)