From the beginning of 2020, the beverage industry in general and the beer and wine industry in particular were affected by the double impact of the Covid-19 pandemic and the Decree No. 100/2019/ND-CP (Decree 100) on administrating violations in the field of road and rail traffic.

Along with the food industry, the beverage manufacturing has always been one of the important and potential economic sectors in Vietnam. This is an industry that mobilizes a lot of social resources, especially from domestic and foreign private sectors, creates jobs and contributes to sate budget every year; contribute to social security. However, since the beginning of 2020, the beverage industry has been affected by the double impact of the Covid-19 pandemic and Decree 100, resulting in the production capacity of the beverage business group currently operating at less than 80% compared to the level before Covid-19 pandemic. While more than 50% of customers have spent more on foods that strengthen resistance and immune system… but 63.7% of customers have cut spending on beer and wine (According to Entrepreneur Magazine 9/2020).

Due to that double impact, many large enterprises in the beverage industry recorded a decrease in revenue in 2020. Typically, Saigon Beer – Alcohol – Beverage Corporation (Sabeco) reported negative profit in the first and second quarter of 2020, however, in the third quarter of 2020, the business situation was brighter. For the whole year of 2020[1], Sabeco’s net revenue reached VND 27,961 billion, down by 26.2% over the previous year; profit after tax reached VND 4,937 billion, down by 8.1%. For Hanoi Beer – Alcohol – Beverage Corporation[2] (Habeco), sales and service revenue in 2020 reached VND 7,514.4 billion, down by 20.1%; net profit from business activities reached 485.1 billion dong, down by 25.4%. Observing the impact of Decree 100 shows that the flow of visitors to restaurants has decreased markedly and people tend to switch to other drinks such as spring water, carbonated water, non-alcoholic beverages…

In the period 2016-2020, the beverage industry develops at a fast rate, meeting domestic consumption demand and contributing to export turnover. On average during this period, the index of industrial production of the beverage industry increased by 5.8%/year; in which 2016 increased by 10.4%; in 2017 increased by 6.1%; in 2018 increased by 7.9%; in 2019 increased by 10.5%; in 2020 alone, a decrease of 5.1% due to the impact of the Covid-19 pandemic and the Decree 100. Consumption of beverage products, especially alcoholic beverages, tends to increase in the period 2016-2019, but decreases sharply in 2020 when Decree 100 CP comes into effect. In 2019, the average beer consumption per person was 47.6 liters, equalling to 1.2 times in 2015; spirits and white wine is 3.4 liters, equalling to 1.02 times. In 2020, the amount of beer of all kinds per capita is 40.5 liters, down by 7.1 liters compared to 2019; beer output reached 3,955.1 million liters, down 13.9%; the consumption index of the beverage industry decreased by 6.3% compared to 2019. In the first 5 months of 2021, the Covid-19 pandemic continued to be complicatedly, some localities had to implement social distancing to prevent disease, limit gatherings and eating in public places. Therefore, the index of industrial production (IIP) of the beverage industry in May decreased by 0.5% compared to the previous month; however, in general, the first 5 months of 2021 increased by 12.8% compared to the same period last year because the IIP in the first 5 months of 2020 sharply decreased by 14.6%; beer production in the first 5 months of 2021 reached 1,714.1 million liters, an increase of 11.7% (the first 5 months of 2020 decreased by 24.5%).

Currently, many domestic enterprises have high competitiveness, leading the market in producing products to meet domestic demand such as Vinamilk, TH True Milk Dairy Joint Stock Company, Nutifood … However, for the small and medium-sized enterprises, there are still many difficulties with technical barriers from the market, small volume of goods, high logistics costs that increase the cost of goods. In addition, changes in consumer behavior and negative impacts from the Covid-19 epidemic require businesses to develop production and business strategies to suit the new situation. At the same time, in order to comply with the road traffic law, businesses need to convert their products from alcoholic beverages to non-alcoholic beverages to meet people’s consumption needs.


[1] Sabeco’s financial report 2020: https://www.sabeco.com.vn/Data/Sites/1/media/co%20dong/bao%20cao%20thuong%20nien/20-04-2021/2020AR%20-%20VN.pdf

[2] Habeco’s financial report 2020: https://www.habeco.com.vn/default.aspx?page=shareholder&do=year&category_id=c47d2252-a936-429a-9b9b-d2cd75e3489a.