Alcohol industry calls for Government help

Friday, Mar 13, 2020 08:54

The Hai Xom - a Ha Noi popular beer franchise - closed its branch in Hoang Quoc Viet Street in January as it was difficult to attract customers. — Photo

The high consumption of beer in Viet Nam has previously attracted brewers to cash in. But now, the Viet Nam Beer Alcohol Beverage Association (VBA) is asking the Government for help.

In early March, VBA sent a dispatch to the Prime Minister and some relevant ministries proposing they remove difficulties for the beer-alcohol-beverage industry. The association said: “Since the beginning of 2020, the industry has been affected by the double impact from COVID-19 epidemic and Decree 100.”

The association attributed Decree 100 and the Law on Alcohol Harm Prevention, which bans drivers from drinking alcohol and took effect on January 1, and the current COVID-19 pandemic to the drop in alcohol sales.

In the first two months of the year, sales of beer and wine decreased sharply despite Tet (Lunar New Year) holidays and festive season, which were often the largest consumption period of the year for the products.

VBA said in the letter: “Beer trading firms saw consumption fall by 40-50 per cent in the period, while restaurants and catering services lost 70-80 per cent of customers compared to the same period in 2019.”

A representative of the association claimed: “Lots of small businesses have had to close due to difficulties.”

The representative thought the reduction in beer and wine consumption has not only influenced the industry but also affected partners and suppliers, restaurants and bars, leading to thousands of unemployed workers, especially in the service sector.

More importantly, the representative thought the decline would lead to difficulties in tax collection, as the industry was facing high special consumption tax, corporate income tax, value-added tax and personal income tax.

He added: “The reduction of alcohol and beer consumption could lead to a shortfall of about VND30 trillion (US$1.28 billion) in the State budget in 2020, caused by less contribution from alcohol and beer enterprises as well as related services.”

After clarifying all difficulties, the VBA asked the Government to reduce taxes and fees to help the industry overcome the situation to stabilise production.

The association also asked the Government to postpone increasing taxes for the industry in the near future so that businesses can invest in developing production.

At the same time, it expected the Government to develop policies encouraging the production of low or alcohol-free products to meet the new demand of consumers after Decree 100.

The VBA also asked the Prime Minister to lower the sanctions related to the use of alcohol when driving.

No official data is available for the country’s consumption of alcohol in 2019, but different sources estimated it at 4.9 billion litres. According to VBA, the figure is expected to climb to 5.6 billion litres in 2035.

Each Vietnamese person drank an average of 43 litres per year, making the country the third-largest per capita consumer in Asia, just behind China and Japan. — VNS

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