The Demise of the Bapi Food Distribution Chain

The Rise and Fall of Bapi Food:

On May 26, 2022, BAPI Hoang Anh Gia Lai Joint Stock Company was established through a collaboration between Hoang Anh Gia Lai Joint Stock Company (HAG) and Dong A Pharmaceutical and Trading Company Limited with a charter capital of VND 50 billion. Hoang Anh Gia Lai held 55% of the charter capital, while Dong A Pharmaceutical owned 40%.

BAPI Hoang Anh Gia Lai primarily focused on distributing and retailing banana-fed pork supplied by Hoang Anh Gia Lai, along with other food products.

At its launch, BAPI Hoang Anh Gia Lai quickly opened nearly 200 Bapi Food stores in many provinces and major cities across the country.

In early 2023, HAGL announced the transfer of a portion of its ownership in BAPI. Bầu Đức, the chairman of HAGL, stated that they invited Mr. Đỗ Xuân Diện to hold a 35% stake in BAPI, emphasizing: “Transferring the banana-fed pork stores doesn’t mean we’re making a loss; it’s about bringing in more partners.” From this point, BAPI transitioned from a subsidiary to an associated company of HAGL.

By August 2023, HAGL had reduced the number of stores to just 52, including stores and supermarkets, with 46 of them located in Ho Chi Minh City.

During this phase, Mr. Đoàn Nguyên Đức, Chairman of the HAGL Group (Bầu Đức), acknowledged that HAGL was not profiting from pig farming due to a significant drop in pork prices. However, Bầu Đức assured investors that HAGL’s pig farming was not operating at a loss; only BAPI was losing money due to unstable distribution, but the loss was insignificant. According to Mr. Đức, HAG and BAPI are separate legal entities, and HAGL’s participation in BAPI is limited to 30%. Therefore, if there is a loss, it would be a loss in association, and not significant.

The reduction in the number of stores in the banana-fed pork retail system hit the partners of BAPI Hoang Anh Gia Lai hard, from equipment suppliers to franchise partners.

The most notable incident was the lawsuit filed by CNC Gia Khang Company Limited, a supplier of display cases, refrigerators, and freezers to Bapi Food stores, with a value of VND 2.6 billion. BAPI Hoang Anh Gia Lai had paid more than VND 1.2 billion. The remaining amount has not been fully paid despite repeated requests for payment. In court, a representative of BAPI Hoang Anh Gia Lai acknowledged the debt and pledged to make full payment.

In late 2023, HAGL announced the completion of the transfer of its entire 2.75 million shares in BAPI HAGL. As a result, BAPI HAGL is no longer an associated company of Hoang Anh Gia Lai.

Bầu Đức also declared the abandonment of the previous “from farm to table” plan and closed the chapter on 583 days of partnership with the “banana-fed pork” distribution chain, Bapi Food.

Despite closing numerous stores and the inaccessibility of Bapi Food’s website and online sales application, HAGL’s banana-fed pork products are still available for purchase on the website heoanchuoihagl.com/Zalo, distributed directly by HAGL.

Partnering with Kingfoodmart: A New Outlet for HAGL’s Banana-Fed Pork

Kingfoodmart is an emerging mid-range supermarket chain in the southern region, with 81 stores as of the end of 2024, including 78 in Ho Chi Minh City and 3 in Binh Duong.

After Seedcom sold Cau Dat Farm, its subsidiary, Kingfoodmart, no longer had its own source of raw materials. On the positive side, they could import any good food brand to sell. However, the chain lacked its own identity or brand to create additional competitive advantages in the market.

Meanwhile, WinMart not only offers dry foods and spices produced by its parent company, Masan, but also has its own meat brand, MeatDeli, 3F chicken, and WinEco vegetables. Bach Hoa Xanh, on the other hand, has its own farm, Nong Trai 4K, in Ba Ria-Vung Tau.

Mr. Dinh Anh Huan, Chairman of Seedcom, shared: “While searching for partners providing clean and quality food in the domestic market, I came across HAGL. But since I didn’t know Mr. Duc, I asked Mr. Hai (Chairman of NutiFood – Tran Thanh Hai) to introduce me.”

Mr. Huan also shared that HAGL plans to “raise more fish and grow more vegetables” to utilize agricultural by-products and pig/chicken manure to sell to Kingfoodmart in the future. With its vast land resources and rich agricultural experience, HAGL will likely face few challenges in cultivating additional food sources.

This development allows HAGL to once again pursue the ‘from farm to table’ trend in modern agriculture.