Alcoholic Drinks in Vietnam

Alcoholic Drinks in Vietnam
Euromonitor International
August 2020
ALCOHOLIC DRINKS IN VIETNAM Passport i
LIST OF CONTENTS AND TABLES

EXECUTIVE SUMMARY .............................................................................................................. 1
COVID-19 impact on alcoholic drinks ....................................................................................... 1
COVID-19 country impact ......................................................................................................... 1
Beer drives growth, which hampers growth in spirits ................................................................ 2
Players in beer dominate, with Sabeco expanding its distribution ............................................ 2
A gradual return to growth thanks to A young population ......................................................... 3
Chart 1 Alcoholic Drinks Off-Trade Volume Sales Growth Scenarios: 2017-
2024 ............................................................................................................. 3
Chart 2 Alcoholic Drinks On-Trade Volume Sales Growth Scenarios: 2017-
2024 ............................................................................................................. 4
Chart 3 Alcoholic Drinks Impact of Soft Drivers on Off-Trade Volume Sales:
2016-2024 .................................................................................................... 4
Chart 4 Alcoholic Drinks Impact of Soft Drivers on On-Trade Volume Sales:
2016-2024 .................................................................................................... 5
MARKET BACKGROUND ............................................................................................................ 6
Legislation ................................................................................................................................ 6
Table 1 Number of On-trade Establishments by Type 2014-2019 ............................ 8
TAXATION AND DUTY LEVIES ................................................................................................... 8
Table 2 Taxation and Duty Levies on Alcoholic Drinks 2019 .................................... 8
OPERATING ENVIRONMENT ..................................................................................................... 9
Contraband/parallel trade ......................................................................................................... 9
Duty free ................................................................................................................................. 10
Cross-border/private imports .................................................................................................. 10
KEY NEW PRODUCT LAUNCHES ............................................................................................ 10
Outlook ................................................................................................................................... 10
MARKET INDICATORS ............................................................................................................. 10
Table 3 Retail Consumer Expenditure on Alcoholic Drinks 2014-2019 ................... 10
MARKET DATA .......................................................................................................................... 11
Table 4 Sales of Alcoholic Drinks by Category: Total Volume 2014-2019 .............. 11
Table 5 Sales of Alcoholic Drinks by Category: Total Value 2014-2019 ................. 11
Table 6 Sales of Alcoholic Drinks by Category: % Total Volume Growth 2014-
2019 ........................................................................................................... 11
Table 7 Sales of Alcoholic Drinks by Category: % Total Value Growth 2014-
2019 ........................................................................................................... 11
Table 8 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade:
Volume 2019 .............................................................................................. 12
Table 9 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: Value
2019 ........................................................................................................... 12
Table 10 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: %
Volume 2019 .............................................................................................. 12
Table 11 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: %
Value 2019 ................................................................................................. 12
Table 12 GBO Company Shares of Alcoholic Drinks: % Total Volume 2015-
2019 ........................................................................................................... 13
© Euromonitor International
ALCOHOLIC DRINKS IN VIETNAM Passport ii
Table 13 Distribution of Alcoholic Drinks by Format: % Off-trade Value 2014-

2019 ........................................................................................................... 13
Table 14 Distribution of Alcoholic Drinks by Format and by Category: % Off-
trade Volume 2019 ..................................................................................... 14
Table 15 Forecast Sales of Alcoholic Drinks by Category: Total Volume 2019-
2024 ........................................................................................................... 14
Table 16 Forecast Sales of Alcoholic Drinks by Category: Total Value 2019-
2024 ........................................................................................................... 15
Table 17 Forecast Sales of Alcoholic Drinks by Category: % Total Volume
Growth 2019-2024 ..................................................................................... 15
Table 18 Forecast Sales of Alcoholic Drinks by Category: % Total Value
Growth 2019-2024 ..................................................................................... 15
GLOBAL MACROECONOMIC ENVIRONMENT ........................................................................ 16
GLOBAL INDUSTRY ENVIRONMENT ...................................................................................... 16
DISCLAIMER ............................................................................................................................. 16
SOURCES.................................................................................................................................. 17
Summary 1 Research Sources ...................................................................................... 17
ALCOHOLIC DRINKS IN VIETNAM Passport 1
ALCOHOLIC DRINKS IN VIETNAM

EXECUTIVE SUMMARY
COVID-19 impact on alcoholic drinks

COVID-19 is expected to have a significant negative impact on total volume sales of alcoholic
drinks in Vietnam in 2020, with a double-digit decline. However, this overall performance hides
two very different trends, with the on-trade channel expected to see an enormous volume
decline, and the off-trade channel expected to see double-digit growth.
When COVID-19 arrived in the country, the government was very quick to react to try and
stop the spread of the virus. During the social isolation period in April, all restaurants, bars and
nightclubs has to close, which had a strong negative impact on sales of alcoholic drinks.
Although restrictions were lifted in May, they have had to be re-imposed in places where the
virus has taken a hold once again later in the year, limiting sales once again. Meanwhile, even
in areas where outlets have been reopened, social distancing measures have had to be
implemented to maintain consumers’ safety and ensure that the virus cannot spread. This limits
footfall in on-trade establishments. Another factor limiting footfall is consumers’ reluctance to
return to on-trade channels. This is partly due to concern about contracting the virus in crowded
places, but is also due to increasing cost-consciousness, as the measures taken to control the
spread of the virus are having a negative impact on the economy and on consumers’ disposable
incomes.
Although not related to COVID-19, another major factor negatively impacting the on-trade
channel in 2020 is new legislation on drink driving from January of this year. A zero tolerance
approach was applied to the level of alcohol in the blood or breath, whilst the penalties
increased, and were applied to all drivers of both cars and motorcycles, and even cyclists. As
the public transportation infrastructure is not good, people who visit on-trade outlets have no
other way to get home, and due to strict enforcement, more consumers are either drinking soft
drinks or not visiting on-trade outlets. This had a particularly strong negative impact on sales in
January 2020, during the Tet holiday.
Although off-trade sales are expected to increase in Vietnam in 2020, it is not expected to be
anywhere near enough to offset the on-trade decline. Many consumption occasions are
expected to be lost rather than moving from on-trade to off-trade. Meanwhile, some consumers
are expected to switch to drinking soft drinks at home, rather than the alcoholic drinks they
would have consumed if they had gone out for the evening.
Spirits is expected to see the strongest total volume decline, maintaining the trend seen at the
end of the review period. Although cider/perry is expected to see the slowest decline, this is a
very small category growing from a very small base, and has little impact on overall sales of
alcoholic drinks. Of the three main categories, wine is expected to see the slowest decline. This
is mainly consumed by those on higher incomes, who are more likely to be able to afford to
continue to purchase their favourite alcoholic drinks. Sales of alcoholic drinks via e-commerce
were very low in 2019, and although it is expected that sales via this channel will increase in
2020 due to the lockdown, particularly beer, it is unlikely to account for a large share of sales
moving forward.
COVID-19 country impact

Vietnam proved to one of the first Asian countries to successfully contain the spread of
COVID-19, with it seeing very few cases in the early stages of the pandemic. Social isolation
guidelines were introduced during 1-22 April 2020. During the social isolation period, grocery
retailers remained open, while other stores were shut. Social distancing of two metres was
strictly imposed at all grocery retailers. Vietnam suspended all flights from mainland China on 1
February, followed by all international flights from 25 March.
Social isolation guidelines in Hanoi and Ho Chi Minh City have been lifted, although
restaurants must comply with strict guidelines from local authorities. Schools and businesses
reopened from 4 May, but non-essential services such as bars and karaoke parlours remained
closed. The authorities in Ho Chi Minh City also permitted sports centres and indoor sports
activities, allowing gyms to reopen. In addition, the limit on public gatherings was increased to
30, people from a previous limit of 20. Vietnam gradually opened up business activities,
although restrictions on international travel remain in place until further notice, with anyone
entering the country having to quarantine for 14 days.
However, restrictions are now having to be re-imposed in some high-risk areas. For instance,
at the end of July Da Nang was seeing a resurgence of the virus, leading to a 15-day quarantine
of the city and the evacuation of 80,000 people. A few days later the neighbouring city of Hoi An
was also quarantined. It remains to be seen whether further lockdowns will be needed in other
areas of the country later in the year.
Beer drives growth, which hampers growth in spirits

Alcoholic drinks saw strong total volume growth in 2019, which was higher than the increase
seen in the previous two years. Other than the tiny category of cider/perry, which saw strong
growth due to its small base, beer saw the strongest total volume growth in 2019, whilst also
remaining the biggest category. The price of beer is more affordable compared with wine and
spirits. As such, beer is popular amongst Vietnamese consumers with various incomes.
Meanwhile, consumers are also switching to beer for health reasons, as it is perceived as
causing lower harm to health than spirits due to its low ABV. The strong performance of beer
placed strong pressure on other types of alcoholic drinks, such as spirits. Players in beer can
launch frequent advertising campaigns, even television advertisements, to maintain and
increase brand awareness, which is not allowed by players in spirits, for instance, as these
products are over 15% ABV. Advertising of beer tends to boost sales on special occasions in
particular. Spirits, meanwhile, therefore saw the slowest total volume growth in 2019.
Rising premiumisation is being seen in beer in Vietnam. More consumers are paying attention
to premium beer thanks to its better quality and taste. Most players are therefore focusing on the
design of their packaging labels to communicate a premium image. For instance, the leading
player Thai Beverage, through its local arm Saigon Alcohol Beer & Beverages Corp (Sabeco),
rebranded the packaging design for Bia Saigon.
E-commerce recorded strong development in terms of the number of retailers and number of
transactions in Vietnam at the end of the review period, thanks to rapid growth in the number of
young internet users and better transportation. Examples of important players in 2019 are Tiki
and Adayroi. This development also boosted sales of beer via e-commerce, although it should
be noted that sales of spirits and wine via e-commerce are negligible.
Players in beer dominate, with Sabeco expanding its distribution

As the leader in beer, during 2019 Saigon Alcohol Beer & Beverages Corp (Sabeco) was able
to maintain its leading position in overall alcoholic drinks, since beer accounts for the largest
share of volume sales. After its acquisition by Thai Beverage in December 2017, the company
was able to leverage the rich knowledge of management and production, and the extensive
distribution network of Thai Beverage, to enhance its performance in the domestic market. With
greater financial support, the company was more confident following its plan to expand from its
stronghold area of Ho Chi Minh in the south of Vietnam to central and more northern parts of
Vietnam to combat the more intense competition in beer from players such as Hanoi Alcohol
Beer & Beverages Corp (Habeco), which remained in third place in beer in 2019. Over the
forecast period, Sabeco is expected to maintain its lead in alcoholic drinks thanks to its strong
foundation in Vietnam. Other players will not find it easy to keep up with Sabeco’s position, due
to its strong financial ability, wide distribution and extensive knowledge of the beer category.
Wine and spirits were much smaller and much more fragmented categories in 2019, with the
smallest players, included under “others” accounting for nearly two thirds of sales. Therefore, all
the top 10 players in beer in 2019 were also the top players in alcoholic drinks.
A gradual return to growth thanks to A young population

After the expectation of a strong total volume decline in 2020, a return to growth is forecast for
alcoholic drinks in 2021. However, the opposite trend is expected compared with 2020, with a
return to on-trade growth, but an off-trade decline. This is because many consumers are
expected to return to on-trade outlets such as restaurants, bars and nightclubs as they become
less concerned about the risk of contracting the virus. They will therefore purchase less alcohol
off-trade to drink at home.
However, normalisation is expected to take some time, with 2022 also seeing a year of
recovery for the on-trade channel, with a double-digit increase forecast. Even in this year, on-
trade and total volume sales are not expected to return to the pre-COVID-19 (2019) level, with
this not forecast to be achieved until 2023. Some consumers are expected to be unlikely to
return to eating and drinking outside of the home until a vaccine is available, especially if they
have existing health problems. Meanwhile, a large number of consumers are expected to be
careful with money due to the economic impact of measures implemented to prevent the spread
of COVID-19. With lockdown measures leading to rising unemployment and a hit to the
economy, consumer caution is expected to continue beyond 2020. Some on-trade outlets are
also expected to remain closed, as social distancing measures mean it would not be profitable
to reopen. This is also expected to lead to only a slow rate of recovery in the forecast period.
Cider/perry is expected to see the strongest total volume CAGR in the forecast period,
although this is mainly due to its very low base. It is seeing rising popularity in the country as it is
a novelty, and is therefore expected to recover sooner than other alcoholic drinks categories,
although it will not have a major impact on overall sales. Of the three biggest categories, wine
and beer are expected to see the strongest performances, with spirits suffering from the move
by consumers to alcoholic drinks with a lower ABV, and the ban on marketing and advertising
such products.
Vietnam has a rising population, and also a low median age, which is expected to maintain
total volume growth in all categories in the forecast period, with positive CAGRs expected both
on-trade and off-trade despite the massive impact early in the review period. The younger age
groups tend to drink more than older consumers, and are also more willing to move to premium
products and try novelties. This is expected to ensure a return to the growth rates seen at the
end of the review period, before COVID-19 hit.
Chart 1 Alcoholic Drinks Off-Trade Volume Sales Growth Scenarios: 2017-2024
Source: Euromonitor International Industry Forecast Model

Note: C19 Pessimistic 1 represents a modelled scenario with an estimated probability of 25-35% over a 1-year
horizon, factoring in macro drivers including GDP, stock prices, business and consumer confidence rates
alongside infection rates, supply chain and labour supply disruption rates
Chart 2 Alcoholic Drinks On-Trade Volume Sales Growth Scenarios: 2017-2024

Note: C19 Pessimistic 1 represents a modelled scenario with an estimated probability of 25-35% over a 1-year
horizon, factoring in macro drivers including GDP, stock prices, business and consumer confidence rates
alongside infection rates, supply chain and labour supply disruption rates
Chart 3 Alcoholic Drinks Impact of Soft Drivers on Off-Trade Volume Sales: 2016-2024

Note: The above chart shows the growth decomposition split by macro drivers such as GDP per capita and
population alongside soft drivers listed as having a positive (+) or negative (-) impact on the total growth
rate
Chart 4 Alcoholic Drinks Impact of Soft Drivers on On-Trade Volume Sales: 2016-2024

Note: The above chart shows the growth decomposition split by macro drivers such as GDP per capita and
population alongside soft drivers listed as having a positive (+) or negative (-) impact on the total growth
rate
MARKET BACKGROUND
Legislation
Legal purchasing age and legal drinking age

▪ In 2008, a new law stated that people aged under 18 were not allowed to buy or consume
alcoholic drinks. However, since its implementation the law has been poorly enforced, as
juveniles can still easily buy alcoholic drinks.
▪ In order to help solve the issue of underage drinking, several educational programmes about
the impact of alcoholic drinks have been introduced in high schools in a collaboration between
the Ministry of Health and Ministry of Education.
Drink driving
▪ Drink driving is a serious problem in Vietnam, with a large number of road accidents being a
result of drink driving. Official data show there were over 4,000 traffic accidents in the country
in the first quarter of 2019, leading to 1,905 deaths. Drink driving was to blame in 274
accidents.
▪ According to Decree 171/2013/ND-CP, dated 13 November 2013, fines of VND500,000 to
VND1 million for those who ride motorcycles (including electric scooters) can be issued for
those who have from 50mg to 80mg per 100ml of blood or from 0.25mg to 0.4mg per litre of
breath. For car drivers, fines of VND2 million to VND3 million can be issued should this
regulation not be complied with. In both cases, the driving licence of the offender is revoked
for one month, and the vehicle is impounded for seven days. For those who have more than
80mg per 100ml of blood or more than 0.4mg per litre of breath, fines are from VND2 million
to VND8 million, depending on the vehicle driven. The revocation of driving licence increases
to two months.
▪ Despite the heavy penalties, the law is enforced ineffectively. Testing equipment for blood and
breath samples is not effectively applied by the police. Corruption is also an issue, with some
police officers accepting bribes from drivers who do not want to pay the full fine.
▪ However, from 1 January 2020, decree 100/2019 and the Law on Alcohol Harm Prevention
will implement a zero tolerance strategy, penalising drivers for even a trace of alcohol in the
breath or blood, and increasing the penalties, which also now apply to all drivers of cars and
motorcycles, as well as cyclists. In the context of the increasing number of severe traffic
accidents caused by drunk drivers, the ban is a necessary solution, according to the National
Assembly Committee for Social Affairs. This new law is expected to have a negative effect on
the growth of alcoholic drinks over the forecast period, especially in 2020. Consumers may
reconsider when they want to drink alcoholic drinks in consumer foodservice operators, as
they could receive a fine and lose their licence.
Advertising
▪ In 2014, under the provisions of the Law on Advertising, for alcoholic drinks of 15% ABV or
more, advertising is prohibited. However, there is still no ban on beer advertising.
▪ In response to the law, players in spirits and wine have to promote their products through on-
trade establishments such as bars and restaurants. Commercial posters and promotions are
common practices to attract consumers in restaurants. Wine traders also take advantage of
posters in retail outlets, as well as wine-tasting events.
▪ The law also states that budgets for advertising cannot exceed 10% of the total expenditure of
the enterprise. This restriction limits multinational breweries’ opportunities to extend
advertising activities into major campaigns. Consequently, they must resort to other solutions,
such as hiring promotional staff to offer beer in restaurants, classifying this expenditure as
employment costs.
▪ The Law on Preventing and Combating the Harmful Effects of Liquor and Beer will take effect
on 1 January 2020. The new law will ban the advertising of alcoholic beverages on television
and other media platforms between 18:00hrs and 21:00hrs, with the exception of programmes
relayed from foreign broadcasters. In addition, alcohol advertisements in the media directed to
people aged under 18, and the use of images, characters and film music to advertise
alcoholic drinks will be prohibited. The advertising of products with an ABV of over 15% will
also still not be allowed.
Smoking ban
▪ Smoking in public areas, including theatres, cinemas, offices, hospitals, libraries, bus and
train stations and airports, as well as on public transportation, is banned in Vietnam.
▪ The administrative penalties for violations of regulations on smoking are based on article 23 of
Decree No 176/2013/ND-CP, as follows:
▪ -A warning or a fine of VND100,000 to VND300,000 for one of the following acts: a)
Smoking in prohibited places; b) Leaving cigarette ash or ends in improper places.
▪ -A fine of between VND3 million and VND5 million for one of the following acts: a) No sign
with the word or symbol “smoking ban” in places banning smoking; b) The offender is not
required to stop smoking in an establishment; c) The owners of a facility do not organise,
guide, inspect and supervise the implementation of regulations banning smoking in places
under their management and administration.
▪ -A fine of between VND5 million and VND10 million for one of the following acts in places
reserved for smokers: a) No room ventilation and separate tobacco smoking area; b) No
container for cigarette ash or ends; c) No prominent signs at appropriate locations; d) No
firefighting equipment.
▪ Despite the law, smoking in public is still evident in the country. In some high-end restaurants,
a non-smoking area has been made available, but such areas are usually smaller than the
smoking areas.
▪ Generally, Vietnamese men have the habit of smoking and drinking together. This leads to a
suggestion that cutting the number of places for smoking might result in a reduction in the
general consumption of alcoholic drinks in the country.
Opening hours
▪ For off-trade outlets, there are no defined operating hours for the sale of alcoholic drinks.
Consumers can buy products during an outlet’s regular opening hours. On-trade outlets are
banned from operating between 24.00hrs and 08.00hrs. Only bars in tourist accommodation
rated 3-star or higher are allowed to operate after 24.00hrs, but no later than 02.00hrs.
▪ The Law on Preventing and Combating the Harmful Effects of Liquor and Beer will take effect
on 1 January 2020. Restrictions on the sale of alcohol for on-site drinking from 22:00hrs to
08:00hrs are expected to be added to the law.
On-trade establishments
▪ The number of foodservice outlets continued to gradually increase over the review period, as
did the number of bars/pubs in big cities. By the end of the review period, many more
Vietnamese consumers, especially younger adults, preferred to eat out due to their busier
lifestyles. Furthermore, consumers have many different choices of cuisine, which are
becoming more widely available in Vietnam, especially in big cities such as Ho Chi Minh City
and Hanoi. Thus, sales of alcoholic drinks consumed through the on-trade channel saw a
healthy increase, especially beer.
▪ However, stricter drink driving laws will take effect on 1 January 2020, which is likely to have
some negative effect on the consumption of alcoholic drinks in on-trade outlets. The effect
might be serious in the short-term, within three months of the new law. However, over the
forecast period as a whole, the negative impact of the new law on alcoholic drinks is expected
to be low.
Table 1 Number of On-trade Establishments by Type 2014-2019
2014 2015 2016 2017 2018 2019
Cafés/bars 28,391 28,827 29,373 29,721 29,997 30,770

Full-service restaurants 105,589 111,244 116,811 122,206 127,675 132,993
Limited-service 8,565 8,935 9,319 9,646 9,934 10,151
restaurants
Self-service cafeterias - - - - - -
Street stalls/kiosks 147,893 148,596 149,156 149,594 149,950 150,253
TOTAL 290,438 297,602 304,659 311,167 317,556 324,167
Source: Euromonitor International
TAXATION AND DUTY LEVIES

▪ From May 2001, based on Decree 46/2001/QD-TTG, alcoholic drinks could be imported into
Vietnam without licensing and quotas. Taxation on alcoholic drinks in Vietnam comprises
import tax, special tax and sales tax.
▪ In terms of import taxes, Vietnam has various trade agreements which dictate the import
taxes on alcoholic drinks from different countries, as laid out in the table below. Furthermore,
for alcoholic drinks imported from the EU, Vietnam has imposed a new preferential import
tariff of 65% on a number of specific wine and spirits products.
▪ Besides import taxes, alcoholic drinks face the Special Consumption Tax (SCT). This is a type
of excise duty, but at a higher level. For imported products, SCT is calculated based on the
CIF price plus import tax, and is based on the manufacturer’s selling price (msp) for locally-
produced products. From 2014, the SCT for all types of beer, including barrel beer, was 50%.
For alcoholic drinks of 20% ABV and over, the SCT rate increased to 65% from 1 January
2018. For wine and spirits below 20% ABV, the SCT rate increased to 35% on 1 January
2018.
▪ Sales tax in Vietnam (VAT) is 10% for all alcoholic drinks. The government is likely to
maintain this rate in the future.
Table 2 Taxation and Duty Levies on Alcoholic Drinks 2019
Excise tax (%)
Wine and spirits

- 20% ABV and above 65
- Below 20% ABV 35
Beer 65
Import tax (%)
ASEAN (ATIGA)
Beer 0
Grape wine 0
Flavoured grape wine and vermouth 0
Non-grape wine (incl sake) 0
India (AIFTA)
Beer 65
Grape wine 65
Korea (AKFTA)
Beer 0
Grape wine 0
China (ACFTA)
Beer 0
Grape wine 0
Japan (VJEPA)
Beer 65
Grape wine 65
Non-grape wine (excl sake) 65
Sake 16
VAT (%) 10
OPERATING ENVIRONMENT
Contraband/parallel trade
Contraband/parallel trade is an issue in alcoholic drinks in Vietnam, with this trade occurring
mostly in spirits, which offers the most profit to smugglers. It is estimated that 80-90% of the
spirits sold are contraband. This type of trade is prominent, as the import tax on alcoholic drinks
is very high. The prices of contraband products are usually 30-50% lower than the prices in
official off-trade outlets. Hennessy, Rémy Martin, Martell Cordon Bleu and Johnnie Walker are
brands that are often sold through contraband/parallel trade. On the other hand, wine and beer
are mostly absent in contraband/parallel trade. Most beer brands are manufactured locally and
benefit from a lower tax rate, resulting in lower prices than for spirits. Demand for wine is lower
than for spirits, so the potential profits on trading wine via contraband/parallel channels are more
limited. Counterfeiting and smuggling have been major concerns for the government, as well as
consumers in Vietnam. As the profits on illegal products are enormous, counterfeiters and
smugglers are willing to take the risk of breaking the law for this profitable business. This
problem negatively affects the potential growth of spirits and reduces the government’s revenue
streams, as well as potentially harming consumers’ health.
Liquor and beer traded and circulated in Vietnam must conform to standards and technical
regulations and satisfy the prescribed product and goods quality requirements as well as food
safety conditions. Counterfeit liquor, beer products failing to ensure food quality and safety, and
smuggled liquor and beer of unclear origin are confiscated and disposed of in accordance with
the law.
Duty free
Duty free is a sales channel for travellers arriving in and leaving Vietnam, with alcoholic drinks
mostly purchased as gifts. This channel accounts for only a small proportion of off-trade sales
and does not affect sales of alcoholic drinks in the main off- and on-trade channels.
Cross-border/private imports
Whiskies and local spirits are privately imported into Vietnam from neighbouring countries
such as Cambodia, Thailand and Laos. These products avoid tax so they are able to offer
cheaper prices and high alcohol content. As a result, they are widely consumed. However, the
sales margins on these products are not very high and they do not have a major impact on
overall sales of alcoholic drinks in the domestic market.
KEY NEW PRODUCT LAUNCHES

New product launches in 2019 included Heineken Silver, which is a smooth, less bitter, easy-
to-drink beer, whilst still maintaining the signature Heineken full-bodied taste. Its distinctive silver
packaging marks it out as a premium brand.
Meanwhile, in 2019 Sabeco relaunched its flagship Bia Saigon brand (which includes Bia
Saigon Special, Bia Saigon Export and Bia Saigon Lager) as part of an initiative to cement its
leading position in beer. Bia Saigon’s rejuvenation kicked-off with the introduction of a new
premium packaging design highlighting the dragon logo, a symbol long associated with the
company, as well as Vietnam itself. The brand rejuvenation campaign was the company’s latest
initiative to further develop its business. After enhancing its production capability, supply chain
management and sales and marketing approach, this new campaign represents the next step in
the company’s growth plans.
Outlook
Due to increasing consumer demand, the premiumisation trend is expected to continue in
alcoholic drinks over the forecast period, once the negative impact of COVID-19 has passed.
Key players in beer will focus on marketing and branding activities to establish a premium image
for their brands to increase their sales. However, they are also likely to continue spending on
building strong distribution networks, which has proven to work well in the Vietnamese market.
MARKET INDICATORS
Table 3 Retail Consumer Expenditure on Alcoholic Drinks 2014-2019
VND million
2014 2015 2016 2017 2018 2019
Total 28,225,2 30,778,5 33,037,4 36,086,2 39,438,6 43,091,8

74.5 86.6 97.6 95.8 15.6 49.8
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Note: 2019 data is forecast
MARKET DATA
Table 4 Sales of Alcoholic Drinks by Category: Total Volume 2014-2019
2014 2015 2016 2017 2018 2019
Beer (million litres) 3,451.8 3,765.0 4,097.1 4,328.3 4,533.4 4,907.8

Cider/Perry ('000 litres) - - 571.4 794.1 1,024.6 1,306.1
RTDs ('000 litres) - - - - - -
Spirits ('000 litres) 45,585.8 50,593.3 54,607.0 57,752.0 59,823.3 61,841.3
Wine (million litres) 37.2 39.3 41.4 43.3 45.3 47.2
Alcoholic Drinks 3,534.6 3,854.8 4,193.7 4,430.2 4,639.6 5,018.2
(million litres)
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
Table 5 Sales of Alcoholic Drinks by Category: Total Value 2014-2019
VND billion
2014 2015 2016 2017 2018 2019
Beer 136,835.6 148,152.4 166,423.8 184,459.5 204,503.0 228,140.7

Cider/Perry - - 54.4 78.3 101.8 131.4
RTDs - - - - - -
Spirits 20,236.7 21,804.9 23,350.1 25,548.7 27,279.6 28,993.0
Wine 7,479.0 8,314.7 9,207.5 10,221.8 11,264.1 12,249.7
Table 6 Sales of Alcoholic Drinks by Category: % Total Volume Growth 2014-2019
% total volume growth

2018/19 2014-19 CAGR 2014/19 Total
Beer 8.3 7.3 42.2

Cider/Perry 27.5 - -
RTDs - - -
Spirits 3.4 6.3 35.7
Wine 4.2 4.9 27.0
Alcoholic Drinks 8.2 7.3 42.0
Table 7 Sales of Alcoholic Drinks by Category: % Total Value Growth 2014-2019
% local currency, current value growth
2018/19 2014-19 CAGR 2014/19 Total
Beer 11.6 10.8 66.7

Cider/Perry 29.1 - -
RTDs - - -
Spirits 6.3 7.5 43.3
Wine 8.8 10.4 63.8

Table 8 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: Volume 2019
Off-trade On-trade Total
Beer (million litres) 1,471.7 3,436.1 4,907.8

Cider/Perry ('000 litres) 393.7 912.4 1,306.1
RTDs ('000 litres) - - -
Spirits ('000 litres) 17,859.4 43,981.9 61,841.3
Wine (million litres) 13.7 33.6 47.2
Alcoholic Drinks (million litres) 1,503.6 3,514.5 5,018.2
Table 9 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: Value 2019
VND billion
Beer 53,277.1 174,863.6 228,140.7

Cider/Perry 24.2 107.3 131.4
RTDs - - -
Spirits 4,573.8 24,419.1 28,993.0
Wine 1,988.6 10,261.2 12,249.7
Alcoholic Drinks 59,863.6 209,651.2 269,514.8
Table 10 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: % Volume 2019
% volume analysis
Beer 30.0 70.0 100.0

Cider/Perry 30.1 69.9 100.0
RTDs - - -
Spirits 28.9 71.1 100.0
Wine 28.9 71.1 100.0
Table 11 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: % Value 2019
% value analysis
Beer 23.4 76.6 100.0

Cider/Perry 18.4 81.6 100.0
RTDs - - -
Spirits 15.8 84.2 100.0
Wine 16.2 83.8 100.0
Table 12 GBO Company Shares of Alcoholic Drinks: % Total Volume 2015-2019
% total volume
Company 2015 2016 2017 2018 2019
Thai Beverage PCL - - 37.6 38.6 38.8

Heineken NV 28.4 29.3 29.9 31.5 32.8
Hanoi Alcohol Beer & 16.0 15.2 13.5 12.0 11.8
Beverages Corp (Habeco)
Carlsberg A/S 7.2 7.0 6.9 6.6 6.7
Sapporo Holdings Ltd 1.3 1.3 1.3 1.3 1.2
San Miguel Corp 0.7 0.8 0.8 0.9 0.9
Anheuser-Busch InBev NV 0.2 0.4 0.4 0.4 0.5
Oetker-Gruppe 0.4 0.3 0.3 0.3 0.3
Thang Long Liquor JSC 0.2 0.2 0.2 0.2 0.2
Bitburger Braugruppe GmbH 0.1 0.1 0.1 0.1 0.1
Others 45.5 45.4 8.9 8.1 6.7
Total 100.0 100.0 100.0 100.0 100.0
Table 13 Distribution of Alcoholic Drinks by Format: % Off-trade Value 2014-2019
% off-trade
2014 2015 2016 2017 2018 2019
Store-Based Retailing 100.0 100.0 100.0 99.4 99.1 98.8

- Grocery Retailers 100.0 100.0 100.0 99.4 99.1 98.8
-- Discounters - - - - - -
-- Food/drink/tobacco 19.2 20.2 20.8 21.3 21.0 20.7
specialists
-- Hypermarkets 4.8 4.9 4.9 4.9 4.8 4.8
--- Convenience Stores 0.6 0.8 1.2 1.4 1.6 1.8
--- Forecourt Retailers - - - - - -
--- Independent Small 63.2 62.0 60.8 59.4 59.6 58.9
Grocers
-- Supermarkets 11.8 11.9 12.0 12.1 12.0 12.4
-- Other Grocery 0.3 0.3 0.2 0.2 0.2 0.2
Retailers
- Non-Grocery Specialists - - - - - -
-- Drugstores/ - - - - - -
parapharmacies
-- Other Non-Grocery - - - - - -
Alcoholic Drinks
Specialists
- Mixed Retailers - - - - - -
-- Department Stores - - - - - -
-- Mass Merchandisers - - - - - -
-- Variety Stores - - - - - -
-- Warehouse Clubs - - - - - -
Non-Store Retailing - - - 0.6 0.9 1.2

- Direct Selling - - - - - -
- Homeshopping - - - - - -
- E-Commerce - - - 0.6 0.9 1.2
- Vending - - - - - -
Total 100.0 100.0 100.0 100.0 100.0 100.0
Table 14 Distribution of Alcoholic Drinks by Format and by Category: % Off-trade Volume

2019
% off-trade
Beer Cider/Perry RTDs Spirits Wine
Store-Based Retailing 99.0 98.6 0.0 100.0 100.0

- Grocery Retailers 99.0 98.6 0.0 100.0 100.0
-- Discounters 0.0 0.0 0.0 0.0 0.0
-- Food/drink/tobacco 8.7 6.7 0.0 11.5 18.4
specialists
-- Hypermarkets 5.3 12.7 0.0 6.0 8.7
--- Convenience Stores 1.7 6.7 0.0 1.0 0.5
--- Forecourt Retailers 0.0 0.0 0.0 0.0 0.0
--- Independent Small 69.9 0.0 0.0 70.7 49.6
Grocers
-- Supermarkets 13.4 18.4 0.0 10.8 22.8
-- Other Grocery 0.0 54.1 0.0 0.0 0.0
Retailers
- Non-Grocery Specialists 0.0 0.0 0.0 0.0 0.0
-- Drugstores/ 0.0 0.0 0.0 0.0 0.0
parapharmacies
-- Other Non-Grocery 0.0 0.0 0.0 0.0 0.0
Alcoholic Drinks
Specialists
- Mixed Retailers 0.0 0.0 0.0 0.0 0.0
-- Department Stores 0.0 0.0 0.0 0.0 0.0
-- Mass Merchandisers 0.0 0.0 0.0 0.0 0.0
-- Variety Stores 0.0 0.0 0.0 0.0 0.0
-- Warehouse Clubs 0.0 0.0 0.0 0.0 0.0
Non-Store Retailing 1.0 1.4 0.0 0.0 0.0
- Direct Selling 0.0 0.0 0.0 0.0 0.0
- Homeshopping 0.0 0.0 0.0 0.0 0.0
- E-Commerce 1.0 1.4 0.0 0.0 0.0
- Vending 0.0 0.0 0.0 0.0 0.0
Total 100.0 100.0 0.0 100.0 100.0
Table 15 Forecast Sales of Alcoholic Drinks by Category: Total Volume 2019-2024
Million litres
2019 2020 2021 2022 2023 2024
Beer 4,907.8 3,949.0 4,379.5 4,896.7 5,118.8 5,312.6

Cider/Perry 1.3 1.1 1.4 1.6 1.7 1.9
RTDs - - - - - -
Spirits 61.8 49.2 54.2 60.4 62.8 64.4
Wine 47.2 38.3 41.8 46.8 49.0 51.1

trade sources
Table 16 Forecast Sales of Alcoholic Drinks by Category: Total Value 2019-2024
VND billion
2019 2020 2021 2022 2023 2024
Beer 228,140.7 176,555.2 202,865.1 230,534.9 243,269.2 254,697.0

Cider/Perry 131.4 105.2 135.6 155.7 175.8 196.5
RTDs - - - - - -
Spirits 28,993.0 22,093.0 25,282.5 27,936.0 29,279.2 30,465.0
Wine 12,249.7 9,173.9 10,817.9 12,228.1 12,956.3 13,651.9
trade sources
Table 17 Forecast Sales of Alcoholic Drinks by Category: % Total Volume Growth 2019-
2024
% total volume growth

2019/20 2019-24 CAGR 2019/24 Total
Beer -19.5 1.6 8.2

Cider/Perry -13.8 8.1 47.7
RTDs - - -
Spirits -20.4 0.8 4.2
Wine -18.9 1.6 8.3
Alcoholic Drinks -19.5 1.6 8.2
trade sources
Table 18 Forecast Sales of Alcoholic Drinks by Category: % Total Value Growth 2019-
2024
% local currency, constant value growth
2019/2020 2019-24 CAGR 2019/24 Total
Beer -22.6 2.2 11.6

Cider/Perry -19.9 8.4 49.5
RTDs - - -
Spirits -23.8 1.0 5.1
Wine -25.1 2.2 11.4
Alcoholic Drinks -22.9 2.1 10.9
trade sources
GLOBAL MACROECONOMIC ENVIRONMENT

▪ The COVID-19 pandemic has forced governments to quarantine entire countries, disrupted
global supply chains, slashed business and consumer confidence and affected financial
markets. The effects on the global economy are already being felt, and will be substantial, but
the exact magnitude will depend on the length of COVID-19 restrictions.
▪ COVID-19 will severely impact both the supply and demand sides of the economy. At the
same time, monetary policy tools are almost exhausted due to the slow recovery from the
Global Financial Crisis. Interest rates have not recovered, so central banks have to resort to
Quantitative Easing programmes (QEs), but QEs have limited effect on labour markets,
consumer spending and other aspects of the real economy.
▪ Thus, countries have to turn to fiscal stimulus. However, the response to fiscal stimulus will be
limited too as long as people are quarantined in their homes. In the meantime, governments
are helping businesses and citizens by providing emergency loans to cover expenses and
lower the spillover effects through economies, but uncertainty surrounding the pandemic limits
economic activity.
GLOBAL INDUSTRY ENVIRONMENT

▪ COVID-19 will herald a fundamental paradigm shift for the alcoholic drinks industry. While
already facing demographic and saturation induced pressure in mature Western markets and
trade dispute-driven disruption, underlying themes provided many reasons to be positive in
2019.
▪ From the seemingly unstoppable momentum of the premiumisation narrative to the rise of
non-alcoholic adult beverages, themes that have become synonymous with the industry will
need to be reassessed and repositioned into a radically different context.
▪ On the other hand, themes such as the largely complacent and hesitant shift towards online
purchases – an area where the alcoholic drinks industry has historically lagged way behind
most other fmcg industries – will witness a huge acceleration at the same time that entirely
new occasions bridging the gap between the collapsing on-trade and globally quarantined off-
trade underscore the continued relevance of the industry regardless of circumstances.
▪ To better understand the impact of COVID-19 on the industry and what the crisis could mean
for near- and mid-term forecasts, please read the report, The Impact of Coronavirus on
Alcoholic Drinks (April 2020), which serves as an early guide to forecasting the crisis, with
insights on current results, lessons from impacted areas, and scenarios for understanding the
virus’ future impact.
DISCLAIMER
Forecast and scenario closing date: 10 August 2020
Report closing date: 26 August 2020
Analysis and data in this report give full consideration to the impact of COVID-19 on
consumer behaviour and market performance in 2020 and beyond. However, the situation
continues to develop rapidly, and the influence and severity of the pandemic are constantly
evolving. For the very latest insight on COVID-19 and its impact on industries and consumers, at
both global and national level, readers can access strategic analysis and updates on
www.euromonitor.com and via the Passport system, where new content is being added on a
systematic basis.
SOURCES
Sources used during the research included the following:
Summary 1 Research Sources

Official Sources Center for Information Industry & Commerce -
Ministry of Industry & Trade (VITIC)
Chamber of Commerce & Industry
General Department of Statistics
General Department of Taxation
General Department of Vietnam Customs
General Statistics Office of Vietnam (GSO)
Japan Customs Office
Korean International Trade Association
Trade Associations Bureau National Interprofessionnel du Cognac

(BNIC)
Cámara Nacional de la Industria Tequilera
Comité Interprofessionnel du Vin de

Champagne (CIVC)
Office International de la Vigne et du Vin
Office of Vietnam Association of Beer-Wine-

Beverage
Poste d'Expansion Economique
Scotch Whisky Association
Vietnam Alcohol Beers Beverages Association
Vietnam Association of Beer, Wine &

Beverage (VBA)
Vietnam Beverage Association
Vietnam Chamber Of Commerce & Industry
Trade Press Bao Cong Thuong
Beer World
Beverage Daily
Beverage World
BizLIVE
Brands Vietnam
Café F
CAND Online
Dien Dan Doanh Nghiep Online
Dow Jones Business News
Drinks International
Gia Lai Online
Ha Noi Moi
Moi Truong & Phap Luat Online
Nguoi Lao Dong
Nhip Song So Online
Nikkei
Quang Ngai News
Sai Gon Giai Phong
Saigon Economic Times
Saigon Tiep Thi
Saigon Times Weekly
Saigon Times, The
Salut Vietnam
Thanh Hoa News
Thao Van Hoa, The
Thoi Bao Tai Chinh Vietnam Online
Tuoi Tre Online
VGP News
Vietnam Beverage Magazine
Vietnam Business Forum
Vietnam Economic Times
Vietnam Investment Review
Vietnam News
Vnexpress
VTC News
Wine & Spirits International
World Drink Trends

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LIST OF CONTENTS AND TABLES

Table 13 Distribution of Alcoholic Drinks by Format: % Off-trade Value 2014-

ALCOHOLIC DRINKS IN VIETNAM

COVID-19 impact on alcoholic drinks

COVID-19 country impact

Beer drives growth, which hampers growth in spirits

Players in beer dominate, with Sabeco expanding its distribution

A gradual return to growth thanks to A young population

Chart 1 Alcoholic Drinks Off-Trade Volume Sales Growth Scenarios: 2017-2024

Source: Euromonitor International Industry Forecast Model

Chart 2 Alcoholic Drinks On-Trade Volume Sales Growth Scenarios: 2017-2024

Source: Euromonitor International Industry Forecast Model

Source: Euromonitor International Industry Forecast Model

Source: Euromonitor International Industry Forecast Model

Legal purchasing age and legal drinking age

Table 1 Number of On-trade Establishments by Type 2014-2019

2014 2015 2016 2017 2018 2019

Cafés/bars 28,391 28,827 29,373 29,721 29,997 30,770

TAXATION AND DUTY LEVIES

Table 2 Taxation and Duty Levies on Alcoholic Drinks 2019

Excise tax (%)

Wine and spirits

KEY NEW PRODUCT LAUNCHES

Total 28,225,2 30,778,5 33,037,4 36,086,2 39,438,6 43,091,8

2014 2015 2016 2017 2018 2019

Beer (million litres) 3,451.8 3,765.0 4,097.1 4,328.3 4,533.4 4,907.8

Table 5 Sales of Alcoholic Drinks by Category: Total Value 2014-2019

Beer 136,835.6 148,152.4 166,423.8 184,459.5 204,503.0 228,140.7

Table 6 Sales of Alcoholic Drinks by Category: % Total Volume Growth 2014-2019

% total volume growth

Beer 8.3 7.3 42.2

Table 7 Sales of Alcoholic Drinks by Category: % Total Value Growth 2014-2019

% local currency, current value growth

2018/19 2014-19 CAGR 2014/19 Total

Beer 11.6 10.8 66.7

Wine 8.8 10.4 63.8

Table 8 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: Volume 2019

Off-trade On-trade Total

Beer (million litres) 1,471.7 3,436.1 4,907.8

Table 9 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: Value 2019

Beer 53,277.1 174,863.6 228,140.7

Table 10 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: % Volume 2019

Beer 30.0 70.0 100.0

Table 11 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: % Value 2019

Beer 23.4 76.6 100.0

Table 12 GBO Company Shares of Alcoholic Drinks: % Total Volume 2015-2019

Thai Beverage PCL - - 37.6 38.6 38.8

Table 13 Distribution of Alcoholic Drinks by Format: % Off-trade Value 2014-2019

Store-Based Retailing 100.0 100.0 100.0 99.4 99.1 98.8

Non-Store Retailing - - - 0.6 0.9 1.2

Table 14 Distribution of Alcoholic Drinks by Format and by Category: % Off-trade Volume

Store-Based Retailing 99.0 98.6 0.0 100.0 100.0

Table 15 Forecast Sales of Alcoholic Drinks by Category: Total Volume 2019-2024

Beer 4,907.8 3,949.0 4,379.5 4,896.7 5,118.8 5,312.6

Wine 47.2 38.3 41.8 46.8 49.0 51.1

Table 16 Forecast Sales of Alcoholic Drinks by Category: Total Value 2019-2024

Beer 228,140.7 176,555.2 202,865.1 230,534.9 243,269.2 254,697.0