Strong beer

On June 3, the Australian Prime Minister had lunch at a restaurant in Hanoi's Old Quarter with many traditional Vietnamese dishes, along with Hanoi draft beer, a familiar drink for the capital's residents during hot summer days.

The host country's friends raised their glasses with the Prime Minister, shouting "one, two, three, cheers!" as is the cheerful habit of Vietnamese people before tasting Hanoi beer.

Drinking cold draft beer every summer afternoon is a habit of many people in the capital. The beer is poured into a large blue glass cup, with tiny bubbles rising from the bottom of the cup.

With an inexpensive price of only about 10,000 VND/cup, draft beer is a popular, thirst-quenching summer drink. During the subsidy period, people in the capital lined up to buy beer for 30 cents a cup at trading stores every afternoon.

Not only that, draft beer is also in the Top specialties that visitors should try when coming to Hanoi, according to the travel website Booking.com.

When talking about draft beer, we cannot fail to mention Hanoi Beer, a brand with a history of hundreds of years. The leader in the draft beer market share in the North is Hanoi Beer-Alcohol-Beverage Corporation (Habeco, code BHN).

Looking back at the history of Habeco, in 1890, the first bottles of Hanoi beer were born. In 1958, the first bottle of Vietnamese beer with the Truc Bach brand was born, marking a major turning point in the beer production industry in Vietnam.

After the renovation period, in May 2003, the Minister of Industry (now the Ministry of Industry and Trade) decided to establish the Hanoi Beer - Alcohol - Beverage Corporation.

By June 2008, the Corporation officially converted its organizational model to a joint stock corporation. In 2017, Habeco officially listed 231.8 million shares on the Ho Chi Minh City Stock Exchange (HOSE).

Currently, Habeco's business market is mainly from Quang Tri to the North. Habeco is holding the 3rd position in market share in Vietnam and number 1 in the Northern beer market. Habeco is gradually building a foundation for development in the Southern market with a system of distributors in Ho Chi Minh City, Binh Duong, Lam Dong and the Central Highlands and Southeast provinces.

At the end of fiscal year 2022, the parent company's main product sales revenue reached more than VND 6,938 billion, up 5% compared to the plan and up 21% over the same period. Total pre-tax profit reached more than VND 517 billion, up 88% compared to the plan and up 37% over the same period.

As of December 31, 2022, total assets were VND 7,233.1 billion, an increase of 2.05% compared to 2021. Of which, short-term assets were VND 4,843.3 billion, accounting for 66.96% of total assets, long-term assets were VND 2,389.8 billion, accounting for 33.04% of total assets.

Reports from several research units show that Vietnam is among the top beer consuming countries in the world. According to a report from Vietnam-Briefing, Vietnam's beer consumption by 2022 will account for 2.2% of the global market, at 3.8 million liters of beer per year. This makes Vietnam the leader in the ASEAN region in beer consumption.

Because of the attractive market, foreign giants are eager to penetrate Vietnam through equitization deals. Saigon Beer is a typical example. In December 2017, Thailand's ThaiBev spent nearly 5 billion USD to buy 53.6% of the shares of Saigon Beer - Alcohol - Beverage Corporation (Sabeco), owned by the Ministry of Industry and Trade.

Saigon Beer has a history of nearly 150 years. From a small brewery, in 1977, the Minister of Food and Foodstuffs decided to assign the Southern Liquor Company to take over and manage the entire factory. In June 1977, the factory was renamed Saigon Beer Factory.

After 5 years of being owned by Thai people, Saigon Beer started to make a profit thanks to market expansion strategies, no longer in the Southern region but covering the whole country. Saigon Beer products are also diverse and can compete with many other international brands.

According to the 2022 Consolidated Financial Report, Sabeco recorded net revenue of VND 34,979 billion and profit after tax of VND 5,500 billion, up 32% and 40% respectively compared to 2021.
Sabeco continues to affirm its commitment to enhancing the position of Vietnamese brands.

In 2023, Sabeco targets revenue of VND40,272 billion and after-tax profit of VND5,775 billion, up 15.1% and 5% respectively over the same period last year.

Wine fades

After integration, foreign wine entered Vietnam through many different channels. Therefore, bottles of Lua Moi wine, Hanoi Vodka or wine no longer appear in Vietnamese families during Tet holidays. Long-standing names in the wine industry are gradually being forgotten and business is declining.

For example, Hanoi Alcohol and Beverage Joint Stock Company (Halico, HNR) has a history of over 100 years, its predecessor being Hanoi Alcohol Factory since 1898. Halico switched to joint stock operation since 2006. In 2018, the company was listed on the stock exchange. Currently, Halico is the largest alcohol producer in Vietnam.

According to Halico, after 2 years of the Covid-19 pandemic, domestic consumption demand has decreased, people have reduced spending, partly towards homemade, low-cost wine products. In addition, the cost of raw materials and service costs have increased, significantly affecting production and business.

In 2022, Halico's wine production output reached 103.7% of the annual plan and 100.75% of the 2021 performance. Meanwhile, domestic wine consumption output in 2022 reached 83% of the annual plan and 91.2% over the same period last year.

Domestic alcohol consumption revenue in 2022 reached 89.4% of the yearly plan and equal to 102.27% over the same period. Due to the difficult consumption situation, Halico lost 16.63 billion VND.

Halico's losses continued to drag on, in the first quarter of 2023, sales and service revenue reached more than VND30.2 billion, a slight decrease compared to VND30.9 billion in the same period last year. After deducting expenses, Halico's after-tax profit was negative more than VND1.2 billion, while in the same period last year, the loss was nearly VND3.6 billion. Thus, since the second quarter of 2017, Halico has recorded 24 consecutive quarters of negative profit.

In 2023, the company plans to have net revenue of more than 126 billion VND, an increase of 14% compared to 2022. Halico targets a pre-tax loss of 15 billion VND, down from a loss of nearly 17 billion in 2022.

Similarly, the once-famous brand Vang Thang Long is also not strong enough to compete with foreign imports. According to the Financial Report of the first quarter of 2023 of Vang Thang Long JSC (VTL), net revenue was more than 3.5 billion VND, down more than 87% compared to the same period; loss of nearly 4 billion VND, increasing accumulated loss to 66.9 billion VND.

As of March 31, 2023, the company's total assets were nearly VND95 billion; of which, VND36.8 billion were long-term assets, mainly fixed assets and receivables. Short-term assets were VND58 billion, but cash and cash equivalents were only VND3.4 billion, while up to VND30 billion were inventories and VND24.3 billion were short-term receivables.

In 2022, the Company also reported a loss of VND 35.7 billion and an accumulated loss of VND 62.7 billion (negative equity of VND 12.2 billion).

Thang Long Wine was formerly Thang Long Beverage Enterprise. In January 2005, the company listed its shares on the HNX. The charter capital at that time was 18 billion VND, of which the State shareholder owned 40%.

The period 2006 - 2010 was the peak period of Vang Thang Long with revenue growing steadily over the years, maintained at around 70 billion VND. Profit after tax was at 5 - 6 billion VND. In recent years, Vang Thang Long's business has been declining.

Recently, the Hanoi Stock Exchange has put Vang Thang Long's VTL shares under trading restrictions from May 31, due to negative equity in the 2022 audited financial report. On the market, VTL shares are currently trading at VND12,300/share as of June 1.

To overcome the difficulties, Mr. Vu Thanh Son, Chairman of the Board of Directors, said that this year, the company will continue to restructure to ensure it is suitable for reality and meets the requirements of production and business activities. The company's leaders are looking for partners to supply and consume the products the company produces and imports, especially imported wines.

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