Vietnam may lose national brands after SOEs are sold to foreign investors

  • 06:14 - 2018/01/19

Many Vietnamese businesspeople are concerned about the the sale of state enterprises to foreign companies which might eliminate their brands. 

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The State plans to disinvest from many enterprises

Da Lan (toothpaste) and Viettronic (electronics) brands, which disappeared from the market after falling into foreigners’ hands, are two examples. 

Traditionally, there were two major goals when selling enterprises. First, the enterprises go for the best possible prices. Second, the Vietnamese brands of the enterprises should be protected.

Traditionally, there were two major goals when selling enterprises. First, the enterprises go for the best possible prices. Second, the Vietnamese brands of the enterprises should be protected.

However, the seller only has one choice. If the state wants to build a company with national brand, it needs to hold a controlling stake in the company and sell no more than a 49 percent stake.

According to economists, the desire to protect domestic brands mostly exists in Asian countries and has become outdated.

Vo Van Quang, a branding expert, said that people don’t talk about national brands, but national brands of international stature.

A brand should be considered a national brand if it has global influence.

If a Vietnamese enterprise is sold to a Thai investor, the brand will still be Vietnamese, and the same financial policy will be maintained with multiple shareholders while the major market will still be Vietnam.

Each brand has its own vitality. Retaining or eliminating a brand after an M&A does not depend on the business owner, but on consumer attitudes.

In the case of Sabeco, if the new owner eliminates the Sabeco brand, other businesses will scramble for the name.

“In other words, Sabeco is a brand known in consumers’ minds and if it can tell stories related to them, it will never die,” Quang said.

Nguyen Tri Hieu, an economist, commented that enterprises being sold by the state are only known in Vietnam, and are not familiar to consumers around the world.

Vinamilk is a large corporation in Vietnam, but it is not recognized as a national brand because it doesn’t compete with other dairy producers in the world market and its products are only sold in Vietnam.

Le Dang Doanh, former head of CIEM (Central Institute of Economic Management), believes there is no need to protect all Vietnamese brands and only certain brands in some business fields should be protected. 

The Ministry of Finance (MOF) said after the sales of Sabeco and Vinamilk,  PetroVietnam, Binh Son Refinery (BSR), PV Power, PV Oil and the subsidiaries of the Vietnam Rubber Group (VRG) will be put on sale in 2018.

Kim Chi

Source: VietNamNet

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