Vietnam & Denmark: Vietnamese Government delays Carlsberg’s plans

An important part of Carlsberg’s strategic battle plan in Southeast Asia has suffered a minor blow as their plans to buy up crucial shares in Hanoi Beer Company are being stalled by the local government, Scandasia announced February 1.

The state-owned brewery Hanoi Beer Company (Habeco) is facing privatization, and Carlsberg is hoping to get a considerable share of the company. However, the government in Hanoi recently decided that only a maximum of 10 pct. of the shares can be sold to a foreign investor. To begin with, the Hanoi government intends to keep 76 pct of the shares themselves, but eventually the main shareholder’s cut might drop to 51 pct – but not any lower than that.

In a growth plan for the booming Vietnamese market, Carlsberg is expecting to achieve ownership of 25 pct of the Habeco shares within three years’ time. Habeco Brewery is Vietnam’s second-largest brewery and is dominating the northern part of the country, including the capitol of Hanoi.

A Mutual Understanding

Almost two years ago, Carlsberg signed a so-called ‘memorandum of understanding’ with the Vietnamese central government concerning a strategic cooperation with Habeco, and the Danish beer giant has therefore kept itself from investing in other brewery companies in Vietnam.
“We cannot say what specific action we are going to take following the recent announcement from the government in Hanoi. But we have a mutual understanding concerning Habeco, and it doesn’t surprise us that the privatization will happen gradually,” Carlsberg’s international chief of press relations Jens Peter Skaarup told the Danish business daily Dagbladet Borsen last week.

Carlsberg already have about 10 pct of the Vietnamese market, which has doubled in consumption within the last 10 years to 15 million hectoliters and is expected to continue its growth by as much as 8 pct a year. The Danish brewery company owns 60 pct of South East Asia Brewery in North Vietnam and half of Hue Brewery in the central part of Vietnam. So far, Carlsberg has not yet begun to play a role in the southern part of Vietnam, where almost 60 pct of the country’s total beer consumption is taking place.

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