The brewers in Vietnam – Focus on Sabeco

Saigon Beer Alcohol Beverage Corporation (SABECO) – July 2012

Founded as Cho Lon Beer Factory under France’s Brasseries et Glacières d’Indochine (BGI), the Group was acquired by The Ministry of Foods after “liberation” in 1975 and became the Saigon Beer Company in 1977. 

Sabeco was created 2003 from the amalgamation of Saigon Beer Company, Binh Tay Distillery, Chuong Duong Beverage Company and Phu Tho Glass Factory thus creating the largest beer company in Vietnam.

Sabeco, like Habeco, is a subsidiary of the state run company VINABECO, however the two businesses behave as competitors in the marketplace. Sabeco has recently been the more successful of the two.

Sabeco is currently the biggest beer manufacturer in Vietnam. It has a strategy of placing breweries throughout Vietnam to reduce transportation costs. To meet the high market demand, it is aggressively expanding its production capacity by two mechanisms:

  • Construction of modern Greenfield breweries. 
  • Acquisition of medium size domestic brewers with some assistance from the Government.

The ownership structure of these breweries varies, ranging from 100% Sabeco ownership to a partial share such as 51%.

Depending on whose numbers you look at, Sabeco has a volume share  of the total Vietnam beer market of between 35% and 51.4%.  This latter figure was Sabeco’s own number, according to its December 2010 research, released at the 2011 shareholder’s meeting.

According to the VBA, Sabeco’s beer production volume in 2010 was 11 million hL.  According to the MoIT the total market in 2010 was 26 million hL, so you can do your own calculations, considering that exports are negligible.

Sabeco’s strength lies in its established distribution network and established presence in the market. Its brands are a safe choice for consumers.

However, despite being the dominant player there are cracks in its armour. As it competes only in mainstream and budget segments, it risks declines in its core mainstream and certainly Bia Hoi volumes as a result of increasing market premiumisation. Furthermore, it appears that its consumer endorsement is based primarily on price benefit and perceived popularity & consensus, rather than strong emotional bonds.

Saigon beer brand family

This “Focus on Sabeco” is our first in a series of articles looking at the background to each of the brewers in Vietnam.  We’ll be publishing our article “Focus on APB”, w/c 2nd July 2012, so please come back then or contact us for more information.

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