The beer industry, along with the commercial and restaurant systems, recorded a 20% decrease in revenue and profit in 2023 due to the alcohol concentration control policy.
The above information was shared by the Vietnam Beer - Alcohol - Beverage Association (VBA) at a conference on the afternoon of March 15. According to this association, the policy of controlling alcohol concentration is one of the reasons for the sharp decrease in beer consumption, especially in restaurants and eateries.
The association estimates that the beer industry will see an 11% drop in revenue and 23% drop in pre-tax profit in 2023. Previously, in 2022, the industry also suffered negative growth of 7%.
For example, the profits of the two "big guys" in the beer industry will decrease sharply in 2023. According to the business results of Saigon Beer - Alcohol - Beverage Corporation (Sabeco), after-tax profit was about VND4,255 billion, down 23%. Excluding the peak of the epidemic in 2021, this figure hit its lowest point since 2016.
Similarly, last year's profit of Hanoi Beer - Alcohol - Beverage Corporation (Habeco) decreased by 30% compared to 2022, to 355 billion VND.
VBA believes that businesses support the policy of controlling alcohol concentration, but the absolute ban affects the production and supply chain of this industry. "Many restaurants and tourist areas are not operating due to lack of customers, leading to a decrease in labor, revenue, profit, and budget," said a representative of VBA.
Mr. Nguyen Van Viet, Chairman of VBA, spoke at the conference on the afternoon of March 15. Photo: VBA
In addition to the alcohol concentration control policy, Mr. Nguyen Duy Hung, Vice President of VBA, said that this industry is also affected by people tightening their spending after the Covid-19 pandemic. The price of raw materials (malt, rice, cans) increased by 20-40%, causing production costs to escalate. This forced them to increase selling prices and consumers had to "bear" this increased cost.
However, according to Mr. Dau Anh Tuan, Deputy General Secretary of the Vietnam Federation of Commerce and Industry (VCCI), the beverage industry is also affected by policy changes, such as special consumption tax.
According to the draft Law on Special Consumption Tax (amended) that the Ministry of Finance consulted on last year, taxes on alcoholic beverages (beer, wine) may increase to control consumer behavior. Currently, the special consumption tax rate on beer is 65%, wine is 35-65% depending on the alcohol content below or above 20 degrees.
VBA representative said tax increase is necessary, but proposed a roadmap to amend the Law on Special Consumption Tax from 2025 onwards, to create conditions to help businesses recover.
Meanwhile, businesses have petitioned the Government not to increase the special consumption tax on this item, due to concerns about significant economic damage to the industry and a decrease in budget revenue. According to them, increasing taxes leading to price adjustments is not an effective tool to help change consumer habits.
Instead, the Government needs to have policies to encourage businesses to innovate technology, create suitable products, and bring benefits to users and the economy.
Phuong Dung
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