Domestic beverage companies were urged to improve their distribution system to protect their domestic market shares amid anticipated rising competition pressure associated with intensive international integration.
As a part of their efforts to implement the task of strengthening connections in the supply chain of Vietnamese products for sustainability, the Ministry of Industry and Trade on September 23 held a conference to connect producers and trading companies in the beverage industry in Hanoi.
According to Le Thi Viet Nga, deputy director of the ministry’s Domestic Market Department, the domestic beverage industry was facing with the risk of narrowing production scales due to the rising competition from foreign rivals.
Nga said the co-ordination between producers and trading companies would create significant impetus for the domestic beverage industry to expand at home market, cut costs and better serve consumers.
Nga also urged beverage companies to apply advanced technologies in production to enhance the product quality for sustainable development.
Le Hong Xanh, Deputy Director of Sabeco, said that many beer giants planned to expand in Vietnam, and in comparison Vietnamese beverage companies would be less competitive and might risk losing in the domestic market.
According to the Vietnam Beer Alcohol Beverage Association, the growth rate of the domestic beverage industry was on a downward trend from 2012. Statistics showed that during 2008-11 period, the industry’s growth rate averaged around 17 but slowed down to 6 percent in 2012 and 4 percent in 2014.
Nguyen Van Viet, the association’s president, said one of the causes was the competition from foreign rivals which was weighing down many domestic beverage companies, especially those involved in small-scale production. Many were dissolved or taken over by foreign rivals.
The competition was anticipated to become fiercer when Vietnam joined FTAs which would cut duties on beverage products to zero.
The association said that the supply chain from production to consumption would be an important solution for the domestic beverage industry. “The challenges need to be tackled through enhanced quality and technology renovation,” Viet added.-VNA