Tag: beer

  • Green Beacon Beer Introduced on Singapore Airlines

    Green Beacon Beer Introduced on Singapore Airlines

    Singapore Airlines will introduce Green Beacon Brewin beer on all business-class flights between Brisbane and Singapore, beginning October 1. The flights will offer the popular Teneriffe brewpub’s Wayfarer American Wheat Beer ale.

    Since opening in 2013, Green Beacon has extended business interstate, selling its beers in Melbourne, Sydney, Perth and the Northern Territory. Its products can be found in bars, bottle shops and restaurants, but now it’s literally taking off.

    “Singapore Airlines saw that business-class customers wanted a craft beer selection on their flights,” says Clarissa Wiederkehr, Green Beacon’s marketing coordinator. And she reckons it’s a great chance for the local brewery to reach a wider audience.

    The collaboration with Green Beacon is part of a Singapore Airlines initiative to source craft beers from local breweries in every state or capital city for their business-class menu.

    A pale ale from Margaret River’s Crazy Monkey Brewery will feature on Singapore Airlines flights from Perth. Melbourne and Sydney’s beers are expected to be announced soon.

  • Carlsberg eyes at least 51 pct stake in Vietnam’s Habeco

    Carlsberg eyes at least 51 pct stake in Vietnam’s Habeco

    The government wants to fully divest its majority stake in Habeco as also in rival Sabeco.

    Danish brewer Carlsberg is keen on increasing its stake in Habeco, one of Vietnam’s biggest brewers, to at least 51 percent, a local news website reported, citing a Habeco executive.

    Vietnam has one of the world’s most attractive beer markets and the biggest in Southeast Asia, buoyed by a young population that consumed nearly 4 billion liters last year. The government wants to fully divest its majority stake in Habeco as also in rival Sabeco.

    Carlsberg, which already owns around 17 percent in Habeco, has been discussing its priority purchase rights with the Vietnamese government, which has delayed the Habeco sale.

    Sabeco, in which the government owns a 90 percent stake, has also seen interest from foreign players such as Dutch brewer Heineken and Japan’s Kirin.

    Vietnam’s Steering Committee for Enterprise Innovation and Development, which oversees the country’s privatization drive, said last month it aimed to “completely resolve problems in strategic cooperation” with Carlsberg, and inform the prime minister about the results by November 15.

    Habeco is still in talks with the Danish company on the stake sale, state-controlled An Ninh Thu Do newspaper quoted Habeco’s deputy chief Vuong Toan as saying.

    The media report also quoted Toan as saying that foreign companies are not allowed to own more than 49 percent of Habeco due to foreign ownership limits.

    Carlsberg said on Friday it would not comment on “rumours.”

    Last month, the company said it held “several constructive meetings with the Vietnamese government to discuss the privatisation process of Habeco.”

    “We now see good progress in these meetings, and will continue these discussions with the Vietnamese government for the next steps,” Carlsberg Chief Executive Cees ’t Hart said at a conference call after its second-quarter earnings on August 16.

  • Australian brewer eyes Sabeco and Habeco shares

    Australian brewer eyes Sabeco and Habeco shares

    With the aim of expanding operations in Vietnam, Carlton & United Breweries (CUB) has become a new competitor in the race to seize the stakes in Hanoi Beer, Alcohol and Beverages Corporation (Habeco) and Saigon Beer, Alcohol and Beverages Corporation (Sabeco).

    The companies intentions were stated by CUB general director Jan Craps at the meeting of Deputy Prime Minister Vuong Dinh Hue and the delegation of Australian enterprises on July 24, according to newswire Vnexpress.

    According to Jan Craps, CUB plans to expand its operations in the southern province of Binh Duong and is looking to become the strategic investor of both Habeco and Sabeco.

    According to information released by the Ministry of Industry and Trade (MoIT) at its monthly press conference organised on July 14, the sale of state stakes will be carried out this year.

    Bui Truong Thang, deputy director general of MoIT’s Light Industry Department, said Habeco will submit its divestment plan to the ministry this week and Sabeco’s divestment plan will also be submitted before the end of the month.

    At present, Habeco signed with Bao Viet Securities Company (BVSC) and Vietnam Valuation and Finance Consultancy (VVFC), appointing them as the consultancy firms for the state divestment.

    Regarding Sabeco, according to unofficial information, a venture of BVSC, VVFC, and Earnst & Young Vietnam Limited was selected as the consultancy group for the state divestment.

    The state divestment from Sabeco and Habeco has also attracted numerous foreign investors. Notably, in November 2016, Thai Beverage Public Company Limited (Thai Beverage), Japanese Asahi Group Holdings Ltd. and Kirin Holdings Co. released their plans to bid for Sabeco’s shares.

    Several other foreign brewers have been eyeing Sabeco since it was earmarked for equitisation, such as San Miguel, Heineken, and SABMiller. The move is part of these companies’ overseas expansion plans to counterbalance shrinking domestic markets.

    Danish brewer Carlsberg, owning a 17.5 per cent stake in Habeco, also intends to increase its holdings.

    The reason for foreign investors’ interest in Habeco and Sabeco is that Vietnam ranked among the Top-10 beer consumption markets in the world at the end of 2016, with total consumption projected to grow by 10 per cent year-on-year, to reach four billion litres in 2017.

    Established in 1907, CUB is currently the largest beer brewer in Australia, holding 47 per cent of the beer market. Some of Australia’s most famous brands, including Victoria Bitter, Carlton Draught, Crown Lager, Melbourne Bitter, Pure Blonde and Cascade come from the company’s breweries. In 2011, the company joined the SABMiller group, the second largest brewer in the world.

  • The State Of The Aging Craft Beer Industry

    The State Of The Aging Craft Beer Industry

    The craft beer industry may still have some few more good years left in it, but its old has started showing after years of enjoy double-digit growth over the past years. Single-digit growth only happened last year and with it come the concern that the industry is set for a poor performance.

    While several factors played a hand in the slowdown, it is most likely that the craft beer industry from here on will be on a downhill journey.

    The Industry Is Aging Well

    As of 2016, the Brewers Association said the growth of the craft beer industry slowed shy of 6%, which was a seven digit drop from that of 2015 and a twelve digits from that of 2014. Well, nothing good lasts forever; likewise, no business can register a torrid growth forever. But it can be said that the craft beer industry did last longer than expected and its reached full maturity. Now focus is on what the future hold for the industry’s producers.

    From the chart above, it’s clear that the industry as seen the last of its good days and it most likely is a victim of its success.

    Boston Beer may not be the first in the craft beer industry but it rapidly became the face of craft beer product. Its success was the start of many other home brewers making their leap in the big-league. The Samuel Adams brands also contributed to the cultural changes that lead to changing how a beer tasted a transition for the weal amber-color beer that were in mass production done by Miller, Molson Coors, and Anheuser-Busch InBev to the dark and richer-tasting brew.

    Bound To Be Bigger Than Ever

    With more than 5,300 breweries in operation, that is an outstanding number that the country has seen it is history. And of these, 99% are in the craft brewing industry. That is a significant figure, a huge leap from that of less than 2,000 breweries in 2011. Based on that information, the breweries growth stands at around 21% annually. Is the craft beer industry running its last leg?

    Boston Beer attribute to its depleted sales to wholesalers and retailers over the last twelve months to the increased demand for shelf space. The wholesalers and retailers are considered as the bridge between the producers and the consumers.

    The growth of the craft breweries caught the attention of mega-brewers but their sales soon took a similar direction, flat-lining and taking a decline soon after. To answer the poor turn of events, Molson launched Blue Moon and Anheuser-Busch followed suit with Shock Top; nevertheless, the domestic beer sales never improved. So, they began purchasing the smaller players in the industry and Anheuser-Busch bagging much of the competitions. Other big players that made significant investments in the craft brewery industry include Constellation, Heineken, and Molson Brands (NYSE:STZ).

    The decline seen in the brewing of craft beers may be attributed to the turn of events stated above. Nearly 1.2 million barrels have been taken out via the acquisitions must of which was from regionals with much of this coming from micro-breweries and brewpubs. As such, the Brewers Associated noted, based on that data, that the craft is bound to get even smaller. This craft beer industry report has an even more in-depth look into this.

    Continuing To Take Market Share

    According to the trade group, a craft brewery qualifies to be considered as such if it produces around six million barrels annually and with a control or ownership by a mass brewer that is below 25% and mostly uses traditional brewing ingredients and methods. Ballast Point Brewing was a known craft brewer; it was bought by Constellation Brands, an acquisition that saw it pulled out of the group. The same fate befall all the other craft beer makers that were acquired by Anheuser-Busch over the past years.

    The remaining breweries, as of 2016, account for the 1.4 million barrels recorded during the same year which was higher than the volume of barrels taken out and a sign of a better things still to come for the industry. Nevertheless, the many craft brewers still in play contributed to an increased competition for the limited shelf space.

    A Shakeout In The Works?

    The craft beer industry is most likely going to consider some reductions and making alliances over the next years. 97 breweries close in 2016, 29 more than what was seen in 2015 and 51 the year before that. The numbers may seem alarming but the market still has many old players and new ones who keep coming in; thus the increased competition only promises to make it harder for brewers to operate profitably.

    Ultimately, the industry will have to consider a craft beer shakeout which may help keep the breweries that are in the pink operational even as the few local favorites fade off.

  • Vietnam reaching a heady high in the global beer business

    Vietnam reaching a heady high in the global beer business

    Drinkers are foaming at the mouth in ‘the next key battleground for brewers.’ With the Vietnamese thirst for beer seeming to know no limits, brewers are finding it hard to resist tapping into the country’s fertile market.

    Vietnam is forecast to lead Southeast Asia to see volume growth of 2.3 billion liters over 2016-2021, market researcher Euromonitor International said in its July report. Southeast Asia’s volume gains will even surpass those of larger regions, such as North America, Europe, the Middle East and Africa, the report said.

    An expanding Vietnamese middle class and youthful population have helped drive a 300 percent surge in beer demand since 2002, according to Euromonitor, which estimates the market was worth VND147.2 trillion ($6.5 billion) last year.

    It predicts per-capita consumption will reach 40.6 liters this year, making Vietnam the biggest beer consumer in Southeast Asia.

    Vietnam will be “the next key battleground for brewers”, cited Euromonitor as saying in a report Friday.

    Saigon Beer Alcohol Beverage Corp. (Sabeco) and Hanoi Beer Alcohol Beverage Corp. (Habeco), the nation’s two largest beer companies, will submit IPO plans to the government this month, an official from the industry and trade ministry told local media last week.

    “The stake-sales will create an opportunity for international companies to expand geographically, especially those still without a presence in Vietnam,” John Ditty, managing partner of KPMG Vietnam’s deals advisory unit.

    A study jointly conducted by Vietnam’s health ministry and the World Health Organization (WHO) last year showed that 77 percent of Vietnamese men drink liquor and beer, and nearly half of them drink at hazardous levels.

    Nguyen Phuong Nam, an official from the WHO, said nearly 67 percent of the 1,840 traffic accident patients involved in the study had high concentrations of alcohol in their blood, and 45 percent had driven after drinking for two hours or more.

    Vietnamese drank 3.8 billion liters of beer last year. That was an average of 42 liters per person, four liters more than 2015, according to data collected by the trade ministry.

  • Hanoi beer loses in home market despite brief fame from Obama dinner

    Hanoi beer loses in home market despite brief fame from Obama dinner

    Hanoians favor Hanoi beer, Sai Gon beer and Heineken. There are no official statistics about the consumption of beer products, but analysts are sure the three brands dominate the Hanoi market.

    Hanoi Beer Alcohol and Beverage Corp (Habeco) has the Hanoi Beer brand and is located in Hanoi.

    Analysts said that the images of Obama drinking Hanoi beer, which appeared in all local newspapers and international mass media, would help Habeco prosper.

    But Hanoi Beer has lost a large part of the market to its rivals.

    After Obama had dinner at Huong Lien bun cha Shop and drank Bia Ha Noi on May 23, the first day of his visit to Vietnam, both brands appeared many times on mass media. Bia Ha Noi was even mentioned in Obama’s speech the next morning.

    However, while Huong Lien bun cha Shop’s business has been thriving since then, Bia Ha Noi is less lucky.

    Many grocery stores and street shops in Hanoi say that youth now prefer Saigon Special of Sabeco, a brewery headquartered in HCMC. The main customers of Hanoi Beer are aged 50 and more.

    “Hanoi beer now is just for older people,” said Do Hoang Yen, the owner of a grocery store on Khuong Trung street.

    The owner of H.B Shop on Truong Dinh street said five to six years ago, Hanoi beer once dominated the Hanoi market and there was no rival in the bottled beer market.

    “The sales of Sabeco’s products are far higher than Habeco’s,” he said. “We can sell only one Habeco product for every two Sabeco products sold.”

    At large supermarkets, people have begun buying beer in large quantities as the summer has come in Hanoi. And Sabeco’s products are favored.

    Xuan Truong, from Bac Tu Liem district, said he prefers Saigon Beer because it is tastier with a strong flavor, while Hanoi Beer tastes flat.

    However, a branding expert said that tastes are always different. He believes that the problem lies in the marketing strategy.

    While Sabeco offers a wide range of products with different price levels, targeting different groups of customers, Hanoi Beer has stayed the same for many years and cannot attract young people.

  • Singapore Airlines teams up with New Zealand craft brewer Garage Project

    Singapore Airlines teams up with New Zealand craft brewer Garage Project

    Singapore Airlines has teamed up with Wellington craft brewer Garage Project to put its beer on all flights to and from New Zealand.

    The airline says that in response to growing demand for craft beer in the air, it will serve Hapi Daze throughout its planes from tomorrow.

    Singapore operates 18 weekly services from New Zealand and the Pacific Pale Ale will be available to up to 400,000 passengers a year.

    The airline’s general manager New Zealand, Simon Turcotte, said the brew showcased New Zealand ingredients, and had broad appeal as a ”great ambassador” for New Zealand craft beer.

    ”In the past we’ve always had a strong emphasis on the quality of our wine programme and that will remain but there’s a growing demand for craft beer.”

    There was demand from traditional markets such as New Zealand, Australia, the United States and Britain but growing interest from new markets in Asia.

    Garage Project is a leading independent, Wellington-based brewery that was started six years ago in an old car garage in Wellington’s Aro Valley.

    Turcotte said his airline always tried to partner with local suppliers wherever it flew.

    He said he was partial to the brew himself but the airline’s beverage experts in Singapore made the final call on the beer which sells for $3.50 a can through the Garage Project’s website.

  • Lotte Liquor launches Fitz, a lighter beer for summer

    Lotte Liquor launches Fitz, a lighter beer for summer

    Lotte Liquor will launch its second beer brand Fitz Super Clear on June 1, the company said. Fitz Super Clear is a lager containing a relatively low 4.5 percent alcohol content. The company said Fitz is designed to serve as a light but refreshing alcoholic drink for the summer.

    “Fitz was developed with a focus to resolve a reputation that Korean beer is tasteless and bland,” the company said. “We tried to eliminate the unnecessary taste that is generated when the temperature and ingredients aren’t kept stable during the brewing process.”

    The beer uses the same “original gravity” method as Kloud products, which don’t add water in the brewing process. It also used the self-developed Super Yeast and enhanced the fermentation rate to 90 percent for a cleaner taste.

    The company launched Kloud in 2014. Kloud has 5 percent alcohol content and has a flavour similar to imported beers from European countries. It’s sometimes criticised for not being suitable for Korea’s somaek drinking culture, which mixes soju with beer.

    Fitz’s target customers are in their 20s and 30s. Kloud is for those who enjoy drinking alcohol while Fitz is for general gatherings because it is lighter and contains less alcohol content.

    Lotte Liquor invested 700 billion won (US$622.6 million) for a second beer manufacturing plant, which is scheduled to open in July. Once it opens, it will be able to produce up to 200,000 kiloliters (55.8 million gallons) of Fitz per year.

    The company aims to generate 90 billion won in sales for Kloud and 70 billion won for Fitz this year.

    The beer costs 1,147 won for a 500-millileter bottle.

  • Habeco targets 9 per cent increase in revenue

    Habeco targets 9 per cent increase in revenue

    Hà Nội Beer Alcohol and Beverage Joint Stock Corporation (Habeco) targets total revenue of over VNĐ8.8 trillion (US$390 million) in 2017, up 9.1 per cent year-on-year.

    The brewer plans to earn pre-tax profit of VNĐ1 trillion this year, up slightly from 2016, and dividends are projected at 20 per cent.

    The company’s revenue in 2016 grew by 8 per cent to reach VNĐ8.1 trillion. Pre-tax profit reached VNĐ997.3 billion, up 0.6 per cent year-on-year.

    With this result, the dividend rate was adjusted upwards to 18 per cent, equivalent to VNĐ417 billion. The company paid 10 per cent dividend in 2015.

    The Ministry of Industry and Trade (MOIT), Habeco’s biggest stakeholder with 81.79 per cent capital, is expected to collect VNĐ341 billion.

    At its 2017 annual general meeting of shareholders held last week, two members of the board of directors were dismissed, including Nguyễn Thị Nga representing the Ministry of Industry and Trade and Tayfun Uner, CEO of Carlsberg Việt Nam, which currently holds a 17.08 percent stake of Habeco.

    Đỗ Xuân Hạ was appointed to replace Nguyễn Thị Nga from May 11 until the Ministry of Industry and Trade has made a decision on personnel.

    Habeco only elected one new member to the board, namely Soren Ravn, Business Development Manager of the Carlsberg Group. With this change, Habeco temporarily has just four board members.

    Headquartered in Hà Nội, Habeco is the largest beer producer in the North and the third-largest beer company in Việt Nam, with popular brands such as Hà Nội Beer and Trúc Bạch Beer. It owns 17 subsidiaries and nine affiliated companies.

  • Vietnam’s top brewer Sabeco tops up profit goal for 2017

    Vietnam’s top brewer Sabeco tops up profit goal for 2017

    The company expects its annual sales to rise 3 percent against last year. Vietnam’s biggest brewer Sabeco is aiming to push sales to more than 1.7 billion liters this year, an increase of 3 percent against 2016, in a bid to raise its annual revenue by 9 percent to VND34.5 trillion ($1.52 billion) and net profit by 1 percent to VND4.7 trillion ($207 million).

    The state-owned company also plans to raise its dividend payments from 30 percent to 35 percent, as agreed by its board of director.

    Those targets will be put on the table at a shareholder meeting on April 18.

    Company bosses said that price cuts on ingredients, a preferential tax policy on malt and stable market growth in rural areas, where Sabeco is the most competitive, are the reasons for the more positive targets.

    Sabeco, known for the Bia Saigon and 333 brands, is also preparing for fiercer competition on the domestic market following Belgium’s Anheuser-Busch InBev entry into the Vietnamese market.

    With the special consumption tax on beer and wine raised from 55 percent to 60 percent on January 1 this year, and set to climb to 65 percent in 2018, as well as a labeling regulation that’s still under discussion, Sabeco is concerned that the at production cost for each beer bottle will be rise by VND200.

    In its financial statement released last month, the brewer reported VND30.66 trillion in revenue last year, up 13 percent from 2015, and a profit of VND4.6 trillion ($205 million), a 33 percent jump.

    According to the Ho Chi Minh City Securities Corporation, Sabeco’s beer sales made up 43.3 percent of the domestic market share last year, a slight decrease compared to 43.9 percent of 2015. It predicted that the figure will edge up to 43.5 percent this year.

    The trade ministry announced in August last year that it planned to sell its entire stake in Sabeco, according to a government report.

    Under the plan, the ministry would have offered a 53.59 percent stake worth VND24.5 trillion ($1 billion) in 2016 before Sabeco made its market debut, and the remaining 36 percent stake worth VND16 trillion ($705 million) in 2017 after the listing.

    However, due to delays, the trade ministry failed to sell its first Sabeco shares as planned.

    Deputy Trade Minister Do Thang Hai told local media on Monday that over 641 million shares in Sabeco had been listed on HOSE on December 6 last year at a starting price of VND110,000 ($4.85) per share. As of April 3, prices stood at VND200,400 ($8.8) per share.

    Beer consumption in Vietnam rose 12 percent year-on-year to reach 3.8 billion liters in 2016, according to the trade ministry.

    Vietnam is Asia’s third largest beer consumer by volume after China and Japan.

    Industry experts expect annual growth of 4 to 5 percent over the next five years. The country’s annual beer output is forecast to hit 4.1 billion liters by 2020, according to government projections.a

  • Muslim Indonesia Joins Global Craft Beer Revolution

    Muslim Indonesia Joins Global Craft Beer Revolution

    Defying an escalating anti-alcohol movement and conservative bureaucrats in the world’s most populous Muslim-majority country, Indonesia’s only craft brewer is tapping into demand for better quality booze among the country’s small number of drinkers.

    Despite the fact about 90% of Indonesia’s population is Muslim, and in theory banned from drinking, most practise a moderate form of Islam and alcohol is available in cities and holiday destinations, with local brewers producing mostly Pilsner lagers.

    Unimpressed by the generic, mass-produced drinks on offer, local businessman Bona Budhisurya and his brother-in-law Jacob Suryanata decided to come up with an alternative, and in 2011 introduced Stark craft beer with a wheat and dark wheat variety.

    “We had been abroad and drank a lot of good quality beer,” said Budhisurya, a member of Indonesia’s Christian and ethnic Chinese minorities, adding that on his return to Indonesia he found that “there was no quality beer here”.

    By producing such brews – generally defined as beverages created in small, independent breweries – they have made Indonesia an unlikely new addition to the global craft beer revolution.

    The trend has seen micro-breweries spring up worldwide as consumers sick of flat, flavourless ales and gassy lagers seek out something with more character. Major beer-consuming countries – such as Britain and the United States – have seen explosive growth in the sector.

    Since its launch, Stark has expanded to include six varieties, including lychee- and mango-flavoured beers and an Indonesian Pale Ale, a less bitter alternative to Indian Pale Ale. But setting up a brewery is a risky move nowadays in Indonesia.

    Although most Indonesians are moderate Muslims and alcohol has long been available, growing opposition from politicians pushing a more conservative brand of Islam has created an uncertain climate.

    The government banned beer sales in the country’s ubiquitous minimarts in 2015, leading to sharp profit falls for major brewers, and Muslim political parties have proposed legislation to prohibit booze consumption entirely, although it seems unlikely this will pass.

    Trouble brewing

    It is hard to get permission to brew alcohol and only a handful of companies – such as Multi Bintang which produces popular local lager Bintang, and is majority-controlled by Dutch brewer Heineken – possess licences that they have had for decades.

    Budhisurya – who studied in the US for several years – eventually managed to obtain a licence in Hindu-majority Bali, a popular holiday island where drinking is more common, and Stark set up its brewery near the town of Singaraja.

    The site has a staff of about 50, including a head brewer hired from Australian beer maker Little Creatures. The company says brewing in Bali gives them an edge as they have easy access to clean water, unlike some other brewers whose operations are near Jakarta where water is often polluted and must undergo a long filtering process.

    “We have a principle – if the water is not good, we can’t make the beer,” told Albert Kurniawan, operations manager at Stark’s brewery,  from the red-brick building.

    Budhisurya said that the biggest challenge has been dealing with the official Food and Drug Monitoring Agency, which must approve alcoholic beverages before their release. He said the official time to get approval from the agency, which is staffed by conservative bureaucrats, is about four months, but in reality it takes six months to a year.

    Still, Stark has persevered and carved out a small niche by mainly selling to bars and some supermarkets favoured by a growing number of Indonesian consumers. Stark says its beers offer a quality alternative to pricey imported ales. It is so far proving a modest success, with about 3,000 to 5,000, 24-bottle cases sold every month, mostly in Jakarta and Bali.

    Due to religious considerations and high taxes that push up prices, relatively few Indonesians drink – alcohol consumption in 2015 was an average of just 1.4 litres per person, according to BMI Research. But the market is still potentially huge in a country of 255 million people, and Stark sees a bright future.

    “It does not matter whether it is local or imported – we are a craft beer, which means quality,” Budhisurya said.

  • Cathay Pacific Is Brewing Its Own Beer

    Cathay Pacific Is Brewing Its Own Beer

    In efforts to beat out their aerial competition, Cathay Pacific has employed something that will appeal to almost everyone, the universally beloved: beer. They’re not giving it away for free or anything, but instead they have decided to make their own custom brew named Betsy Bee (after their first aircraft), in collaboration with Hong Kong Beer Co. The craft ale has Dragon-Eye fruit, honey, and a special type of hop called Fuggle.

    Going along with their marketing drive, ‘Travel well,’ Betsy beer is a “product designed purely with the traveller, and beer lover, in mind,” according to their Generar Marketing Manager, Julian Lyden.

    They will be offering Betsy to business and first class passengers on flights between Hong Kong and the United Kingdom from March 1 until April 30. It will also be sold online at Deli Delight.

  • Carlsberg may not be Habeco’s only option

    Carlsberg may not be Habeco’s only option

    Carlsberg will bid for the State-controlled Hanoi Beer Alcohol and Beverage Joint Stock Corporation (Habeco) in March or April, but the Vietnamese Government may have more than one option to choose from when it comes to buyers.

    The government is seeking to equitize Habeco, the country’s second-largest brewer, by selling its 82 per cent stake. Carlsberg, which already owns 17 per cent of the company, holds priority purchase rights for a 60 per cent stake.

    In October, the government said it would announce the results of negotiations on its priority purchase rights with Carlsberg by the end of that month. It is not clear why the process has been drawn out.

    “We have not been able to make a bid,” the Danish brewer’s CEO, Mr. Cees ‘t Hart, told Reuters, adding that he expects to submit a bid in March or April. There was also uncertainty over whether the Vietnamese Government will abide by Carlsberg’s first right of refusal, he said.

    So what might have actually gone wrong in the negotiation between Carlsberg and the Ministry of Industry and Trade over additional Habeco’s shares?

    A price disagreement almost certainly exists. The government announced in August it wants to sell its 82 per cent stake for $404 million, or about VND48,000 ($2.11) a share, which according to CEO of Carlsberg Vietnam, Mr. Tayfun Uner, is a reasonable valuation, or VND50,000 ($2.2) per share; the same price it paid in the 2008 IPO.

    The government is now keen to take the market price as a reference for the deal. After switching from the Unlisted Public Company Market (UPCoM) to the Ho Chi Minh Stock Exchange (HoSE) on January 19, shares in Habeco rose 15 per cent in their first day of trading to VND147,000 ($6.51) from a starting price of VND127,600 ($5.63), valuing the Vietnamese brewer at $1.5 billion.

    But a 21.1 per cent year-on-year decline in Habeco 2016 net profit to VND740.1 billion ($32.7 million) saw its share price head down. After the February 9 trading session, its shares closed at VND114,000 ($5.03). While price is driven by market demand and supply, the surge in the company’s share price did not accurately reflect the underlying value of the business and is mainly due to speculative buying on very thin volumes, Mr. Uner said.

    Another reason why negotiations could fall apart is that the Vietnamese Government may have more than just one potential buyer. “We have first right of refusal, but if they neglect that for any reason, and we do not have any signal that they will, then we may not be able to buy it,” Mr. Hart said.

    While the partnership agreement signed in 2008 is still legally binding, some of the terms are no longer appropriate under current law. According to a lawyer with knowledge of the agreement, the selection of a single foreign strategic investor for the majority of the stake may be in conflict with regulations in the Competition Law and the Trade Law or the criteria for State divestment from joint stock companies.

    Still, the government has no choice but to sell Habeco as soon as possible. “Letting incapable people continue on the brewer’s management board will eventually destroy the brand and the company, while a fast sale does not necessarily mean Habeco will be let go at a cheap price,” Mr. Nguyen Hoang Hai, Vice Chairman of the Vietnam Association of Financial Investors (VAFI), told VET by phone on February 9.

    With a young, beer-loving population, Vietnam is among Asia’s largest consumer of beer, putting it on the radar of international brewers. The country’s beer market grew at an average compound annual rate of 7 per cent from 1999 to 2015 and touched 4 billion liters in 2016. Growth is anticipated at around 4 per cent to 2021, data from researchers Canadean, quoted by investment bank Liberum, showed.

    Kirin Holdings, Asahi Group Holdings, Thai Beverage, Heineken, and Anheuser Busch Inbev SA are among some 20 investors that have expressed interest in the sale.

    Habeco’s share price soared when a limited number of shares were listed in October, as investors raced to snap them up before the planned sale. The brewer has a market share of about 20 per cent in Vietnam.

  • Vietnam’s top brewer Sabeco posts record profit in 2016

    Vietnam’s top brewer Sabeco posts record profit in 2016

    Together Sabeco and Habeco, both controlled by the state, account for about 60 percent of the domestic market. The country’s biggest brewer Sabeco has reported a profit of VND4.6 trillion ($205 million) for last year, a 33 percent jump from 2015 and 27 percent higher than its target, according to a statement filed at the Ho Chi Minh Stock Exchange.

    Saigon Beer Alcohol Beverage, as the company is officially known, just listed its shares on the country’s main bourse in December, eight years after its initial public offering. It reported VND30.66 trillion in revenue last year, up 13 percent from a year ago.

    Sabeco, one of a few state-owned companies which have performed relatively well, currently remains 89.59 percent owned by the government.

    With a share of nearly 41 percent of the domestic beer market, Sabeco is among the most sought-after companies by foreign investors, with suitors including Japan’s Kirin Holdings, Thai Beverage and Dutch beverage giant Heineken, according to an official from the trade ministry.

    In an attempt to accelerate the privatization of state-owned enterprises, the Vietnamese government said it would sell its entire stake in Sabeco this year.

    Meanwhile, Hanoi Beer Alcohol Beverage, or Habeco, posted a net profit of VND740 billion, down 20 percent from 2015.

    Habeco, with a 19.8 percent market share, is the third largest brewer in Vietnam, behind Sabeco with a market share of 41 percent and Heineken with 21.6 percent, according to the Vietnam Beverage Association.

    That means as combined, Sabeco, known for Bia Saigon and 333 brands, and Habeco account for about 60 percent of the domestic market.

    According to market research company Nielsen, while Sabeco has managed to raise its market share in northern provinces to 15.5 percent in the first half of last year from 10 percent in 2014, Habeco has failed to strengthen its dominant position in the north. The latter controlled 50 percent of the northern market in the first six months of last year, down from 55 percent in 2014.

    Beer consumption in Vietnam rose 12 percent year-on-year to reach 3.8 billion liters last year, according to the trade ministry.

    Vietnam is Asia’s third largest beer consumer by volume after China and Japan.

    Industry expects annual growth of 4 percent to 5 percent for the next five years. The country’s annual beer output is forecast to hit 4.1 billion liters by 2020, according to  government projections.

    The stock market debuts of both Sabeco and Habeco have been sped up in the government’s latest attempt to boost investment and increase transparency.

  • Vietnamese beer market big enough for all brewers

    Vietnamese beer market big enough for all brewers

    Analysts repeatedly warned that the competition in Vietnam would be fiercer as more and more big players, including foreign ones such as Asahi (Japan), Singha (Thailand), Corona (Mexico) and Royal (the Netherlands), have joined the market. However, surprisingly, all of brewers can make big money in Vietnam.

    A representative of Heineken Vietnam said that purchasing power was 20 percent higher than the same period of the previous year.

    At Big C, beer sales have increased by 30-40 percent compared with the end of 2016 as people rush to buy beer to prepare for Tet. The demand is so high that the retailer sells no less than two boxes of beer to one client every day.

    On January 7, at a conference reviewing its operation in 2016, Sabeco, the largest brewer, said 1.584 billion liters of beer were sold in the year, an increase of 8 percent over 2015.

    In fact, beer sales not only have increased on pre-Tet days, but have been increasing steadily over the last 15 years.

    A survey by Sabeco showed that the consumed beer volume increased from 2.33 billion liters in 2010 to 3.6 billion liters in 2015. Every Vietnamese adult drinks 35.5 liters of beer a year, with which Vietnam ranks the second in the world in terms of beer consumption per capita.

    A report by Euromonitor International released in June 2016 showed that the beer sales increased from VND82.376 trillion in 2010 to VND153.943 trillion in 2015, which means a sharp increase of 86.1 percent. The figure was VND166.388 trillion in 2016 and is expected to reach VND218.292 trillion by 2020.

    With an average population increase of 1 percent per annum and a popular beer culture, beer sales are expected to increase in the coming years.

    It is expected that 4.84 billion liters of beer would be consumed by 2020, including 492.9 million liters of high-end products, 3 billion liters of mid-range and 1.34 billion liters of low-cost products.

    Sales are predicted to see an average growth rate of 7.2 percent in the 2015-2020 period.

    Brewers continue to expand production and run marketing campaigns to retain their market share.

    Sapporo Vietnam, which has succeeded with Sapporo Premium Beer, has launched Blue Cap, another brand.

    In late December 2016, Saigon-Binh Tay JSC, belonging to Sabeco, marketed the first products bearing the Sagota brand. Meanwhile, Heineken Vietnam has launched Strongbow, a fermented fruit juice.

    Leo Evers, general director of Heineken Vietnam, said the company was planning to increase production capacity in Vietnam by 2025.

    Sapporo announced that its production capacity would increase from 40 million to 100 million liters.