Heineken is suspending the operation of one of its breweries in Vietnam this month due to weak demand and changing consumption patterns in the country, it said on Monday.
The facility is located in the central province of Quang Nam province, the company said in a statement sent to Reuters.
Heineken said in the statement, ‘The overall economy, including the beer industry, has faced numerous challenges due to the economic slowdown which has led to a fall in consumer confidence and consumption patterns.’
Vietnam’s tighter drink and driving laws, which have restricted the alcohol content for drivers to zero since 2019, has also hurt beer consumption, it said.
As a result, the beer market saw a double-digit decline in 2023 for the first time in decades.
It has continued a mid-single digit decline so far this year, according to Heineken.
'Unlocking Growth'
The company said the decision to ‘temporarily suspend’ the Quang Nam brewery, the smallest of its six breweries in the country, was aimed at addressing ‘asset-related solutions.’
The world’s second largest brewer added, ‘We are seeking efficiency and economies of scale to streamline our operations, to enable us to continue investing and unlocking growth in Vietnam’s market.’
It noted that it will relocate some of the impacted employees to other Heineken breweries in Vietnam.
Heineken has been operating in the Southeast Asian country through Heineken Vietnam, a joint venture with local firm Saigon Trading Group, since 1991.
The company said it had invested over €1 billion in Vietnam and its breweries directly employ over 3,000 employees.
Vietnam’s finance ministry said earlier this month it was planning to hike a special consumption tax on alcoholic drinks to 100% by 2030.
If enacted, this move could further hit the industry in Vietnam.
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