Drink firms hit by foreign rivals

Friday, May 17, 2013 13:41

Beer is produced at Sai Gon-Mien Trung Beer Co. Competition with foreign beverage firms is tough for domestic companies. — VNA/VNS Photo Ngoc Ha

HA NOI (VNS)— Domestic beverage companies were falling into difficulties due to competition from foreign rivals, heard participants said at a workshop on Tuesday.

According to the Viet Nam Beverage Association (VBA), only a small number of domestic enterprises were able to co-exist in a market dominated by foreign giants.

Most recently, the Tribeco brand fell into the hands of Uni-President Group – the biggest shareholder in Tribeco Sai Gon before the company dissolved, the VBA said.

Tribeco posted a four-year loss of VND300 billion (US$14.2 million) before being acquired by its Taiwanese rival.

According to Phan Dang Tuat, chairman of the Sai Gon Beverage Company, domestic drinks companies were struggling to cope with an inundation of fake and low quality wine and widespread advertising campaigns by their international competitors.

With the advertising and marketing cap at 10 per cent as regulated, domestic enterprises could not compete with their foreign counterparts, Tuat said, adding that their larger rivals sometimes spent up to 30 per cent of their expenses on advertising as they did not face any restrictions.

Unless the cap was removed, domestic companies would be unable to protect their brands over the next decade, he said.

Tuan also expressed concern over the penetration of many foreign companies, pointing out that Masan Group recently bought the Phu Yen beer factory and Aneuser-Busch InBev Group planned to enter the Vietnamese market next year.

The VBA cited a report by the Ministry of Planning and Investment which said that some foreign enterprises used price transferring, causing losses to the State budget as well as forcing Vietnamese enterprises to quit joint-ventures.

A representative from the General Depar©ctment of Taxation speaking at the workshop said that unhealthy competition resulting from price transferring had caused the disappearance of many Vietnamese beverage brands. However, it was very difficult to prove a company had committed price transferring, he added.

According to Tran Qui Thanh, general director of Tan Hiep Phat Group, domestic enterprises needed support to ensure healthy competition which was crucial to protecting consumers.

Luong Van Tu, president of the Viet Nam Coffee and Cacao Association, said technical barriers in line with international commitments should be set up to protect domestic production, while State agencies should enhance management to prevent unhealthy competition such as dumping, price transferring and fake and low-quality products.

A programme to encourage consumers to use made-in-Viet Nam beverage products was necessary, while domestic enterprises needed to raise their awareness and knowledge of competition laws, experts said. — VNS

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