Heineken has decided to “temporarily suspend” one of its breweries in Vietnam amid declining beer sales in the country.
The location, located in Quang Nam in central Vietnam, is one of six Heineken locations in Vietnam. According to the Dutch giant, the brewery has the smallest capacity of its factories in the country.
“To remain adaptive and agile in response and anticipation to changing market dynamics, we have decided to optimize our brewery and business operations,” Heineken said in a statement to Just drinks.
“We are looking for efficiencies and economies of scale to streamline our operations, to enable us to continue investing and unlocking growth in the Vietnamese market to continue to support our total workforce and support our business operations and our value chain.”
The brewer said “some” of the affected employees will be relocated to other locations “where possible”.
Heineken, which first started brewing in Vietnam in 1991, pointed to an “economic slowdown” in the country that has hit demand for beer.
The owner of the Amstel brand also said that the recent strict enforcement of Decree 100 – a law that imposes strict penalties for drunk driving – has led to consumers “forming new habits and changing their relationship with alcoholic beverages”, according to Company.
Beer sales in Vietnam fell by “double digits” in 2023 and the market has experienced a “mid-single digit decline in 2024”, Heineken said.
In the first quarter of the year, the group saw underlying sales in Vietnam rise “in the mid-teens”, it said in April. The company pointed to “volume growth in the low teens”, helped by the completion of a year-earlier destocking.
In 2023 as a whole, Heineken saw its sales in Vietnam decline “organically in the low twenties, behind the category” due to destocking and a shift in demand to more mainstream brands.
Earlier this month, it was reported that the Vietnamese government is considering increasing the consumption tax on alcoholic beverages to 100% by 2030. The tax, applied to a range of luxury goods and non-essential items, is currently 65% and covers beer and spirits.
A proposal, which is in the draft stage, proposes to increase this to 70-80% by 2026 and 90-100% by 2030, according to a report by Reuters.
“Heineken ‘suspends’ brewery in Vietnam due to declining beer sales” was originally created and published by Just Drinks, a brand owned by GlobalData.
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