According to the Vietnam Beer - Alcohol - Beverage Association (VBA), in recent years, the beverage industry (beer, alcohol, soft drinks) has faced many difficulties due to Covid-19 and conflicts around the world.
Up to now, the industry has been recording a sharp decline in revenue and profit. As a result, the commercial systems, restaurants, entertainment areas, transportation, and input supply chains have all been indirectly affected, with some indicators even decreasing by 30-40%.
Conference attendees
Speaking at the conference "Meeting with VBA member businesses in Hanoi" held this afternoon, March 15, Mr. Dau Anh Tuan, Head of the Legal Department, Vietnam Federation of Commerce and Industry (VCCI), said that according to VCCI's records, the picture of the economy and business health is currently very worrying.
In particular, beverage businesses are suffering double negative impacts from the Covid-19 pandemic along with the impact of the world situation and related policies, leading to difficulties on top of difficulties.
From a business perspective, Mr. Lam Du An, Deputy General Director of Saigon Beer - Alcohol - Beverage Corporation (Sabeco), said that in 2021 and 2022, the company's growth decreased significantly. In 2023, Sabeco's revenue and pre-tax profit decreased by 11% and 23%, respectively. Processing factories in Sabeco's system also faced difficulties because input prices increased by 20 - 40%, while selling prices could not increase.
Considering a strategic tax regime on alcohol?
The issue that received the most attention at this afternoon's event was the story related to the draft law on Special Consumption Tax (amended).
According to Resolution 25/NQ-CP on the proposal to develop the Special Consumption Tax Law (amended), the Government submitted to the National Assembly Standing Committee a proposal to add the draft law to the 2024 law and ordinance development program at the 7th session in May. After that, the Government submitted to the National Assembly for comments on the draft law at the 8th session in October and approved the draft law at the 9th session in May 2025.
“In this draft law, the beer and alcohol industry will have some impacts in terms of tax increases according to the roadmap, but in the current difficult context, it is possible to propose to delay the schedule of increasing special consumption tax in the coming time,” Mr. Dau Anh Tuan expressed his opinion.
With many difficulties, Sabeco representative proposed to postpone the implementation of special consumption tax increase for another 2-3 years.
According to Mr. Nguyen Duy Vuong, Head of External Affairs Department of Heineken Vietnam Company, the economic situation in 2024 is expected to continue to be difficult. Increasing special consumption tax at this time is not appropriate, leading to serious impacts not only on manufacturing enterprises but also on the supply chain and consumers.
In the long term, Mr. Vuong believes that with the development and increased awareness of the community, the beer industry needs to be encouraged to continue to introduce new, improved, high-quality products, ideally with low alcohol content.
That is why Vietnam, as a developing market, should start considering a strategic tax regime on alcohol to encourage healthy drinking behaviors and balance health with state budget revenue.
“This will take time and should be done step by step so that all members of the industry can plan their business operations accordingly,” said Mr. Vuong.
Recognizing that businesses in general and businesses in the beverage sector in particular are in a very difficult period, Ms. Nguyen Thi Minh Thao, Head of the Department of Business Environment and Competitiveness Research (Central Institute for Economic Management Research), recommended that the drafting agency should comprehensively assess the impact when proposing to expand the taxable subjects and increase the special consumption tax.
Reiterating the proposed viewpoints of having a suitable roadmap for applying increased special consumption tax on alcohol and beer, Ms. Thao suggested that it is necessary to further consider the issue of how to increase it, if any, and how much is appropriate.
"In the upcoming roadmap, the increase as expected by the Ministry of Finance is relatively high. Therefore, businesses should have additional evidence to see what increase is appropriate, does not impact the industry, does not impact too heavily on direct workers and millions of indirect workers," said Ms. Thao.
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