Breweries threaten to raise prices if MOF raises taxes
Breweries threaten to raise prices if MOF raises taxes
Breweries have clamored for the re-consideration of the decision to raise the luxury tax by 10-15 percent, warning that the decision would make consumers suffer, because the manufacturers would raise the selling prices.
Breweries keep complaining
Tayfun Uner from Carlsberg Vietnam said if the luxury tax rate is raised, manufacturers would have to raise the prices by 12 percent, i.e. that the retail prices would increase by 25-30 percent.
Meanwhile, the representative of Habeco, the biggest manufacturer in the north, complained that the 15 percent tax hike is too sharp. He warned that the price increase would prompt people to drink the liquor with high alcohol content or self-made alcohol, which are believed to be harm to people.
Heineken Vietnam believes that it is unfair to impose the same rate of 65 percent on all products. If the products with the very low alcohol content are also taxed heavily, manufacturers would feel discouraged to develop the products good to people’s health.
Money poured into breweries
While breweries keep complaining about difficulties, they still have been trying to expand their production in Vietnam.
Sabeco has kicked off its 50 million liter per annum Saigon – Kien Giang brewery project in the southern province of Kien Giang, capitalized at VND600 billion.
The brewery corporation has been leading the industry in terms of the network expansion. It has been continuously pouring money into new investment projects over the last three years.
In late 2013, Sabeco put the VND450 billion Saigon – Ninh Thuan brewery which has the capacity of 50 million liters per annum in the immediate time and 100 million liters in the next years, into operation.
Sabeco has also started the Saigon – Can Tho project, which is expected to make 50 million liters a year once operational.
As such, Sabeco has poured money into 24 projects, 20 of which have been operational, putting out 1.8 billion liters of beer.
The big manufacturer still plans to set up more breweries in other provinces and cities throughout the country. At least three more would be set up in 2014-2015.
After inaugurating the 200 million liter Hanoi – Me Linh brewery in 2010, Habeco, which is dominating the northern market, opened the Hanoi – Thai Binh brewery in 2011.
To date, Habeco has set up nearly ten of breweries in the northern and central regions, from Hanoi to Phu Tho, Hai Phong, Quang Ninh to Nam Dinh, Thanh Hoa and Quang Binh.
Breweries have arisen in every locality. Especially, two or more beer brands have been co-existing in Nghe An, Phu Tho, Hanoi and Binh Duong.
The high growth rate of the beer market has also attracted foreign brands. Danish Carlsberg has joined forces with domestic companies to set up a lot of joint ventures.
The US Budweiser, after penetrating the Vietnamese market with imports, is now building a brewery in Vietnam which would join the market soon.
Hirofumi Kishi, General Director of Sapporo Vietnam, a joint venture of the Japanese brand with Vietnam’s Vinataba, revealed that its 40 million liter brewery in Long An province ran at full capacity to satisfy the demand in Tet sale season, while affirming that the capacity would be raised to 100 million liters.
vietnamnet
