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Heineken to cease operation of central Vietnam brewery due to weak market demand

Heineken to cease operation of central Vietnam brewery due to weak market demand

Tuesday, June 25, 2024, 13:41 GMT+7
Heineken to cease operation of central Vietnam brewery due to weak market demand
A Heineken brewery in Quang Nam Province, central Vietnam. Photo: Vinh Loc

Heineken, the world's second-largest brewer, has unveiled its plan to shut down its brewery in Quang Nam Province, central Vietnam, citing declining beer sales.

The brewer from the Netherlands officially informed the Quang Nam authorities of the temporary suspension, Nguyen Thanh Phuc, head of public affairs at Heineken Vietnam, told Tuoi Tre (Youth) newspaper on Monday.

Heineken Vietnam did not mention how long this suspension would last.

This factory was put into service in 2007 at the Dien Nam - Dien Ngoc Industrial Park in the town of Dien Ban. 

It has the smallest capacity among the six Heineken factories across Vietnam.

Prior to the outbreak of the COVID-19 pandemic, Heineken Vietnam paid between VND1 trillion (US$39.3 million) and VND1.2 trillion ($47.2 million) in taxes to local authorities each year.

The figures, however, have kept a downward trend in recent years.

The Dutch brewer made its tax contribution of approximately VND20 billion ($787,200) to the local budget during the first quarter of 2024.

In Vietnam, Heineken is officially employing some 3,000 people, creating 250,000 jobs in its supply chain, with its business performance accounting for 1.04 percent of the country’s GDP.

It has also been among the top taxpayers in Vietnam.

But the COVID-19 pandemic then triggered an economic slowdown, resulting in falling demand for a number of products and services, including beer.

Besides, the implementation of Government Decree 100, which stipulates stricter driving-under-influence regulations with more severe sanctions on drunk driving, has left a negative impact on the local beer market.

Therefore, Heineken decided to close its brewery in Quang Nam to optimize its business operations, Heineken Vietnam said in an announcement sent to the Quang Nam authorities.

The brewer added that it would relocate employees affected by the suspension to other factories.

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Hong Ngan - Thai Ba Dung / Tuoi Tre News

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