State to divest capital from two largest domestic breweries

By Van Anh - Jul 18, 2017 | 05:35 PM GMT+7

TheLEADERAfter the slow divestment process of Saigon Beer – Alcohol – Beverage Joint Stock Corporation (Sabeco) and Hanoi Beer, Alcohol and Beverage Joint Stock Corporation (Habeco) in the end of 2016, Ministry of Industry and Trade assured that the stake sales would be complete in this year.

State to divest capital from two largest domestic breweries
The beer business is booming in Vietnam. (Photo: Forbes)

Recently, in a regular press conference, Deputy Director of Light Industry Department (under Ministry of Industry and Trade) Bui Truong Thang said that Habeco and Sabeco would submit their equisition plans to Prime Minister by the end of this month. “If approved, the plans would be carried out in 2017”, he assured.

Sabeco and Habeco control about 60% of the domestic beer market, in which Sabeco dominates with 40%. These two major breweries are among the leading state-owned enterprises to be privatized. At present, the Vietnamese government owns 89.59% of Sabeco’s capital and 82% of Habeco’s capital.

The Vietnamese government planned to completely withdraw capital from these two corporations by the end of 2016. However, the divestment was so slow that the plan needed to change into the open tender method.

To this day, the reference price of Habeco and Sabeco stocks are at VND82,600 (US$3.63) and VND219,500 (US$9.66) per stock respectively. Carlsberg, a famous beer brand in Europe and Asia, has already owned 17.5% of Habeco after the divestment in 2008. This partner offered to buy 61.79% of Habeco stakes and another 20% in the near future using the open tender method. Other major investors like Heineken, Singha, Thai Beverage, Asahi Group Holdings… are expressing their interest in the stake sales of Sabeco.

As the middle class in Vietnam expands, the beer consumption correspondingly increases. According to the Vietnamese Ministry of Health, from 2006 to 2016, average beer consumption in Vietnam doubled. The figure is expected at 7 liters per person by 2025, which means about 4 billion liters of beer will be consumed annually. Vietnam currently holds the fifth position in the top ten Asian beer drinking countries.