Labelling on beer worries producers

Monday, Nov 17, 2014 09:32

Workers pack beer at Dai Viet Beer Factory. Beer producers have been instructed to label and clean beer. — VNA/VNS Photo Tran Viet

HA NOI (Biz Hub) — Stamp-labelling on beer products has stirred the concern of Vietnamese producers and specialists, who noted that the purchase of the required stamps would raise business expenses by several billion dong.

A draft decree on the management of beer production requires stamp-labelling on beer products.

Nguyen Van Viet, president of the Viet Nam Beer-Alcohol-Beverage Association (VBA), said this practice would reduce Vietnamese businesses' competitiveness by raising business costs at a time when the country was set to approve free trade agreements (FTAs).

Viet told a brainstorming conference on the decree which his association organised here recently that stamp-labelling for bottled beer was a waste since all the required information was already printed on the bottle.

Beer producers will have to make and label stamps and clean labelled bottles, he noted.

The Ministry of Industry and Trade (MoIT) said stamp-labelling aimed to manage the entire beer manufacturing process, from production, import, distribution and retail selling, and thereby help prevent trade fraud, smuggling and the production of counterfeit goods, as well as protect consumers and producers.

The MoIT noted that the labelling would also increase the tax collection for the State budget and reduce tax violations.

However, Viet said the aim of limiting fake beer and alcohol products as well as tax arrears did not reflect reality because big beer producers in Viet Nam such as the Sai Gon Beer-Alcohol-Beverage Joint Stock Corporation (Sabeco), Ha Noi Beer-Alcohol-Beverage Joint Stock Company (Habeco), Heineken and Carlsberg accounted for 96 to 98 per cent of total market share.

Phan Dang Tuat, Sabeco chairman, agreed, saying stamp-labelling would cost VND920 billion (US$43.8 million) a year or VND696 per litre of beer.

A previous calculation from Habeco showed that average beer consumption in Viet Nam was around three billion litres a year, equivalent to 10 billion units which needed to be stamp-labelled.

Tran Dinh Thanh, Habeco deputy general director, said the technical requirements of stamp-labelling would require enterprises to invest in new machines. Only three or four countries in the world have applied stamp-labelling, so the supply of machines and equipment for the purpose remained limited, he added.

However, the finance and industry and trade ministries insisted that the regulation was necessary.

Bui Truong Thang, deputy head of the MoIT Light Industry Department said businesses should calm down as this practice would be a State management tool.

Thang said a joint team of the ministries had been organised to implement the stamp-labelling project.

The team has completed the required documents for inviting domestic and foreign suppliers to provide technology and solutions for stamp-labelling.

Huynh Van Nam of the Ministry of Finance's (MoF) Tax Policies Department said previous stamp-labelling experiences showed that the emerging issue was the expense involved and whether the Government or businesses should pay for the cost.

If companies pay for the cost, their profit will be slightly reduced, but not affecting workers' incomes or consumers' expenses, he added. — VNS

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