HCM City(VNS/VNA) - Vietnam is the holy grail for global beer companies, with themarket continuing to grow while many others have flatlined, but the competitionis fierce.   

The country’s beermarket, now exceeding the four-billion-litre mark, is expected to reach 4.6billion litres by 2025 and 5.5 billion litres by 2035.

It has always grown atover 5 percent even as many other markets plateaued or declined in recentyears.

All these mean not onlyforeign investors but also large domestic companies in other sectors castcovetous glances at it.

Thai conglomerate TCC Group,after buying a majority stake in the Saigon Beer Alcohol and BeverageCorporation (Sabeco), is now eyeing shares in other brewers.

Dutch company Heinekenhas bought many beer brands in the country. But experts warn that competitionis brutal and not all brewers are making money.

Nguyen Van Viet, Chairmanof the Vietnam Beer Alcohol Beverage Association (VBA), told themedia recently that many local and foreign brands like BGI, SanMiguel and Foster’s have fallen by the wayside.

More than a decade agoTan Hiep Phat Group sank 20 million USD in a fresh beer brand called Laser,which itself sank without a trace, he said.

Masan, a huge consumergoods manufacturer, started making a beer called Su Tu Trang (White Lion), butsales have not been very good, he said.

Selling beer in Vietnamis very hard, and only the very efficient survive, he said, pointing tothe so-called ‘beer clubs’ that began to mushroom a few years ago ofwhich many have already shut down.

Of the major brewers,Heineken, Sabeco and Tiger are prospering, while others do not makesatisfactory profits, he said.

According to data frommarket research companies, the market is dominated by three large companies -Sabeco, Heineken and Habeco, which have 40 percent, 28 percent and 18 percentmarket shares.

The premium segment hasenjoyed annual growth of 7.2 percent in recent years led by Heineken, Tiger andSapporo.

Vo Van Quang, aneconomist who advises many brewers, said the competition in Vietnam is harshand even major global brands founder if they fail to sell their image toconsumers. Success depends on marketing and not just products and deep pockets,he said.

Japan’s Sapporo now hasa firm foothold in the premium segment, and recently quadrupled the capacity ofits plant to 200 million litres a year. White Lion is gradually finding afoothold in the Mekong Delta provinces.

According to experts,the Vietnamese market will remain attractive for many years, thus luring morenew players.

Competition would thusbecome even fiercer, and the only way companies would succeed is bydiversifying their products and popularising their brands, they said.-VNS/VNA