How will control of alcohol consumption affect Vietnam’s economy?

  • 11:39 - 2018/09/12

The liquor and beer industry contributed VND50 trillion to the national economy in 2017, but the total damages to society might be up to 1.3-3.3 percent of GDP, equal to VND65 trillion.

The World Health Organization (WHO) has sent a letter to Prime Minister Nguyen Xuan Phuc and Minister of Health Nguyen Thi Kim Tien, about a draft of a law on preventing the damaging effects of alcohol and beer for consideration by the National Assembly in October.

WHO has recommended three policies, on liquor & beer pricing, restricting the availability of liquor and beer, and controlling ads for the products.

Experts are still divided on how tight the control over alcohol and beer should be. Some of them emphasize that the industry is a big taxpayer.

The reports of the General Statistics Office (GSO) show steady year-on-year increase in tax amounts collected from the industry. 

The liquor and beer industry contributed VND50 trillion to the national economy in 2017, but the total damages to society might be up to 1.3-3.3 percent of GDP, equal to VND65 trillion.

In 2014, the enterprises in the industry paid VND23.57 trillion to the state budget. The figure rose to VND28.878 trillion in 2015. By the end of 2017, they had paid nearly VND50 trillion.

Heineken Vietnam ranked seventh in the list of 1,000 biggest corporate income tax payers in 2017.

The list, released by the General Department of Taxation (GDT), comprises alcohol and brewery enterprises, such as Sabeco, which holds the largest domestic market share, and Habeco.

Heineken Vietnam reported that the total amount of money that member companies contributed to the national economy had reached VND42.3 trillion, or 0.88 percent of GDP. 

The 2017 combined financial reports showed that the corporate income tax Sabeco paid was VND1.14 trillion, while Habeco paid VND199 billion.

Nguyen Van Viet, chair of the Vietnam Beer-Alcohol-Beverage Association (VBA), has asked state agencies to carefully consider new policies, warning that if the new regulations cause difficulties for domestic producers, they will pave the way for foreign products to conquer the market.

VBA affirmed that Vietnamese alcohol and beer consumption is at a medium level. 

Regarding beer consumption, each Vietnamese consumes 40.8 liters a year, according to a report released by a Japanese university in 2016. 

With the figure, Vietnam is behind South Korea and Japan. Meanwhile, the Czech Republic, which has topped the list of drinkers for 24 years, has consumption level of 143.3 liters per head per annum.

WHO reported that Vietnamese consumed an average of 8.3 liters of pure alcohol in 2015, a very high level in the region.

Source: Vietnamnet

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