The largest brewery in Central Vietnam continues to “lay golden eggs” despite stagnant market share, 13 years after the nearly 2,000 billion sales deal.

Acquisition of a beer factory for nearly 2,000 billion VND

Established in 1990 under the name Hue Beer Factory, with an initial capacity of 3 million liters per year, just enough to meet the thirst of the people of Hue city at that time. In the mid-1990s, local beer companies faced difficulties due to outdated machinery, low production capacity, and a lack of high-quality products.

In order to find a way out, most of these companies shifted their focus to producing draft beer or merged with larger, reputable beer companies to contract manufacture for them.

In 1994, Hue Beer Factory officially formed a joint venture with Carlsberg Group (Denmark), with each party contributing 50% of the capital (about 9 million USD). Since then, Hue Beer Co., Ltd. (Huda) was officially established.

In 2011, the People’s Committee of Thua Thien – Hue province sold its entire 50% stake in the company for 1,875 billion VND to Carlsberg Group (Denmark). After the share sale, this famous beer company officially became a 100% foreign-owned enterprise owned by Carlsberg.

Regarding the amount of 1,875 billion VND, after deducting transfer costs of 545 million VND and income tax of 411 billion VND. The remaining amount of 1,250 billion VND was fully transferred by Denmark and has been spent on infrastructure investment and key local projects.

A force to be reckoned with in the Vietnamese beer scene

Although located in Hue, Hue Beer is one of the four “big players” in the Vietnamese beer market, along with the names Sabeco, Habeco, and Vietnam Beer.

In early 2006, despite the company’s production volume reaching 70 million liters per year, due to catching the taste of customers, products produced were sold out wherever they were delivered, and the situation of insufficient supply to meet demand occurred frequently.

To meet the market demand, in September 2006, phase 1 of Phu Bai Beer Factory was started construction. In a short time, phase 1 of Phu Bai Beer Factory with a production capacity of 80 million liters per year was completed and went into stable production, producing high-quality products.

However, in a very short time after that, the situation of insufficient supply continued to happen. Faced with the high demand of the market for Huda beer, the company once again invested in construction to expand production.

After 12 months of design, construction, installation, and trial operations, by April 2010, phase 2 of Phu Bai Beer Factory project was completed, put into trial operation, reaching the required quality, increasing the total production capacity of the company to 230 million liters per year, meeting the maximum demand for beer consumption domestically and boosting exports to foreign markets.

In reality, the consumption of Huda beer brand of Hue Beer not only holds the number 1 position in the Thua Thien – Hue market (98%) but is also the leader in the northern Central region: 95% in Quang Tri, 65% in Quang Binh, 55% in Ha Tinh, 20% in Nghe An.

At that time, Huda beer accounted for about 8% of the entire market share.

Beer still remains one of the main sources of revenue for Thua Thien – Hue province

Prior to being fully acquired by Carlsberg in 2011, Huda Beer was a profitable business that regularly contributed the largest budget to Thua Thien – Hue province, accounting for 1/3 to 1/2 of the total budget revenue.

In 2010, the company contributed 850 billion VND to the budget and pre-tax profit of about 409 billion VND. Since being acquired by Carlsberg, Huda Beer has continued to be a pillar contributing to the local budget, accounting for 25%-30% of the provincial budget revenue.

On January 24, 2024, the People’s Committee of Thua Thien Hue province announced that the revenue from foreign-invested enterprises in the province in 2023 is estimated to reach over 1,400 million USD, contributing over 10% to the province’s GRDP. In particular, the contribution of Carlsberg Vietnam Beer Co., Ltd. is 3,500 billion VND, accounting for 86.4% of the total budget revenue of foreign-invested enterprises.

Market share does not increase after 13 years but reverse growth, despite the “beer apocalypse”

After being acquired by Carlsberg, this world-renowned corporation has continuously invested and expanded its business activities at the Hue Beer Factory.

Currently, with a total area of ​​116,935.4 m2, the Carlsberg beer factory is located in Phu Bai Industrial Park (Huong Thuy, Thua Thien Hue) and is one of the largest beer factories in the Central region. It is the birthplace of Carlsberg Vietnam’s brands such as Huda, Huda Gold.

The factory has a capacity of up to 360 million liters per year, increasing Carlsberg’s capacity to meet the demand of the entire Central region.

In early 2016, Carlsberg inaugurated a new canned beer production line imported from Germany, with total investment capital of nearly 6.4 million Euros.

At the time of acquiring Hue Beer Factory, this brand accounted for about 8% of the market share in Vietnam. After 13 years, Carlsberg still holds about 8% of the market share in the Vietnamese beer industry. However, the company also believes that there are still many business opportunities and plans to continue expanding its business activities here.

In 2023, despite the pressure of alcohol concentration restrictions and reduced spending due to economic recession, Carlsberg continues to expand its business activities in Vietnam, achieving high production growth (8%) in a context where the general market is forecasted to decline nearly two digits.

Trong Nghia