Vietnam: Saigon Beer, Alcohol and Beverages Corporation (SABECO) and Anheuser-Busch International, Inc., signed on December 5 a Memorandum of Understanding (MOU) for cooperation and experience sharing in the beer business.

The two companies will cooperate in exchanging and sharing technical expertise in several related fields, including management, technology, distribution, marketing, and brand and market development, Stephen J. Burrows, chief executive officer and president of Anheuser-Busch International Inc., said in a statement.

Anheuser-Busch and SABECO recognize the growth potential of the Vietnamese beer market, and this agreement provides the opportunity for both companies to explore and discuss opportunities for further cooperation in the future.

Anheuser-Busch currently exports a small quantity of Budweiser to Vietnam, primarily for hotels and high-end restaurants and bars. However, A-B might brew Budweiser in Vietnam once demand expands, Burrows said in a statement to the Post-Dispatch. "Brewing here is an option, but first we will need to grow our business so that our volume can sustain our minimum brewing requirements," he said.

SABECO is the largest company in beer production and distribution in Vietnam with famous brands such as 333, Saigon Export, Saigon Xanh and Saigon Special. With a market share of more than 30 % in 2003, the company’s beer products are popular among consumers throughout Vietnam. In addition, famous brands of SABECO are exported to a number of international markets.

Anheuser-Busch is one of the world’s largest brewers and is the No. 1 brewer in the United States with a 50 % market share. The company’s brands -- including Budweiser and Bud Light, the world’s best-selling beers -- are sold in countries around the world. In addition to the United States, Anheuser-Busch also has breweries in the United Kingdom and China, as well as partnerships with other leading brewers including Grupo Modelo, the leading brewer in Mexico, and Tsingtao Brewery, the leading brewer in China. In addition, Anheuser-Busch recently acquired Harbin Brewery, the fourth-largest brewer in China.

Vietnam doesn't have the vast market potential found in China, the focus of A-B's foreign investment efforts over the last three years. Earlier this year, A-B acquired Harbin Brewery Group Ltd., China's fourth-largest brewer.

Vietnam's domestic beer sales totaled about 8.3 million barrels last year, up 9 percent from 2002, according to global consumer research firm Euromonitor International. This is smaller than Harbin's beer production of 9.8 million barrels last year. However, foreign companies - such as brewers Heineken NV of the Netherlands and Foster's Group of Australia - have entered the Vietnamese beer market eagerly in the last decade due to the rapidly growing economy and a potentially large consumer base. With a population of 81 million, the Southeast Asian country has one of the fastest-growing economies in the region. The Vietnamese economy is expected to grow about 7.5 percent annually in real terms from 2003 to 2007, according to the World Bank.

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