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Budweiser to Set up Production Facilities in Vietnam

The past decade has seen a plethora of international brands enter Vietnam’s fertile consumer market. As Vietnam’s average income has risen, brands from Pizza Hut to Starbucks have taken advantage of the country’s brand-minded consumers. Following this trend, Budweiser, one of America’s most popular beers, is setting up production facilities in SE Asia’s top beer drinking country.

According to Reuters, an executive from Aneuser-Busch Inbev (AB Inbev), Budweiser’s parent company, has stated that the company has secured a land use license but, in typical Vietnamese fashion, this may not be the case. A senior official of the Ministry of Planning and Investment said:

“The licensing has been decentralized to local authorities. But we have not received any reports from the localities about the project.”

The official went on to caution that investors sometimes try to save the time by applying for both the investment registration certificate and land use rights at the same time.

Some local beer manufacturers are not looking forward to increased competition in an already fierce market. Sabeco Chair, Phan Dang Tuat, recently lamented:

“I am sure that all the brewery manufacturers in Vietnam now have to strain every nerve to work out on the plans to compete with AB Inbev, the owner of so many well-known brands namely Budweiser, Corona, Stella Artois, Beck's and Brahma…It is very likely that they (AB Inbev) would focus on competing in the high-end and luxurious products. Everyone, no matter they are domestic or foreign, would be the rivals of AB Inbev.”

On the other end of the spectrum are those who think AB Inbev is in for a disappointing surprise. Viet, from VBA, doesn’t think big companies will see instant success in the Vietnamese market:

“Many big guys once arrived in Vietnam, but then left because they could not develop here."

Is Budweiser a better been than 333? Probably not. But considering the company’s knack for marketing and the Vietnamese love for foreign brands and beer, Budweiser would be stupid not to take the chance.



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