Linh Chi Craft Beer Pub - Vietnam Investment Review

Can Van Luc, chief economist, BIDV

For the beverage industry, in addition to the general difficulties of all businesses, these industrial firms are struggling with their own challenges. They are not entitled lớn the VAT support cut policy for alcoholic beverages, they were strongly affected by the recent pandemic và the introduction of new drink-driving rules, & the price of some raw materials has risen by as much as 40 per cent.

Beverage firms are also fighting against complicated smuggling and counterfeiting of wine and beer. Lifestyles and consumer behaviour have changed so much & required businesses lớn adapt.

The business results of the entire industry have declined over the years. According to Statista, the total revenue of the Vietnamese beverage market in 2023 was about $27.12 billion, while $10 billion of this came from the non-alcoholic beverage segment; alcoholic beverages were about $17 billion.

The average profit of the entire industry decreased by 12 per cent in 2021, 6 per cent in 2022, & 10-12 per cent on year in 2023. The state budget revenue of the whole industry reduced by an average of 10 per cent annually in the last three years, according to the Vietnam Beer-Alcohol-Beverage Association.

The beverage industry contributes about $2.4 billion khổng lồ the state budget every year, so the draft law on SCT affects not only businesses but also the state budget. This can raise state budget revenue in the short term, but it will reduce consumer demand, reduce business revenue and profits in the medium & long term. Thereby, collection of SCT & corporate income tax will go down.

Moreover, increasing taxes on sugary drinks may not help reduce the rate of obesity & cardiovascular diseases, which have been caused by other reasons. Rising taxes does not help reduce pressure on the state budget to support healthcare.

A sharp & rapid raise in SCT on alcoholic beverages may double difficulties for businesses và workers in the beverage industry và related industries such as packaging, transportation, tourism, và catering services. Furthermore, the draft law also provides the same level on all drinks with different alcohol concentrations. It is difficult khổng lồ regulate consumer behaviour.

Therefore, I recommended that the draft law should have a harmony of interests, responsibilities, và feasibility for the state, businesses, và consumers, based on carefully impact assessment, & a scientific và practical analysis.

The draft should calculate the tax rate, timing, và roadmap for appropriate tax increases. The law should ensure more fairness và reasonableness by applying different tax rates on every alcohol concentration, & sugar content.

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Nguyen Thi Cuc, chairwoman Vietnam Tax Consultants’ Association

Currently, non-alcoholic beverages và soft drinks are not subject khổng lồ SCT in Vietnam. The SCT policy for alcoholic products has been changed 12 times since 1990 in terms of taxable products, rates, & alcohol concentration.

The high & continuous increase in SCT may not be as effective as the target to lớn reduce consumption of alcohol, & mitigate the harmful effects of heavy drinking on people’s health. People will be able khổng lồ access smuggled goods in the premium segment, or self-make products in rural areas, which bởi vì not ensure product chất lượng and greatly affect people’s health.

We suggest the drafting committee considers further study of the impact of rapid and high tax increases on the market, production & business activities, consumers, and public health. We should consider extending the tax rate period in the roadmap so that businesses have enough time to lớn find solutions và build plans. The SCT rate should be raised by 5 per cent in the first year, & remain there for a few years before the next adjustment, instead of SCT climbing every year in the current draft law.

Additionally, it is necessary to carry out drastic measures against smuggled goods and strengthen the management of homemade alcohol without business registration, food hygiene, & safety standards, which easily cause poisonings và deaths.

Bui Thi Viet Lam, country representative US-ASEAN Business Council

SCT on alcoholic beverages varies greatly among countries, depending on economic, socio-cultural factors, people’s income, management policies, drinking age, import tax, & informal products.

Around the world, SCT contributes khổng lồ surging the state budget, orient production and consumption, and protect people’s health. Malaysia experienced a tax shock in 2014-2015 by raising SCT consecutively. The sudden và high tax increase did not help the government achieve its goals, but created negative domino effects in the market, causing loss of government revenue, factories to lớn close, and many people to lose their jobs.

The Australian government estimated a deficit of AU$170 million ($114 million) in 2023 due lớn the surge in alcohol tax, which not only causes a loss of budget revenue but also contributes to inflation and pressure from the cost of living.

In China, import taxes on alcoholic beverages have been gradually reduced & eliminated in line with commitments in không lấy phí trade agreements. It is applying a low SCT rate at 10-25 per cent. Illegal alcohol consumption accounts for about 25 per cent only. This fact shows that a reasonable tax policy helps stabilise budget revenue while reducing illegal alcoholic beverages.

Alcohol tax has long been an important source of revenue for the Chinese government. In 2017, about ¥30 billion (around $4.5 billion) in excise tax was collected from the liquor industry, making it the fourth-largest contributor to total excise tax revenue that year.

Thailand announced tax cuts on alcoholic beverages và entertainment venues to boost tourism. Specifically, it introduced numerous measures to boost tourism-related consumption through alcohol-related policies, including amending the SCT & simplifying the tax on wine.

The Vietnamese government should refer to international experiences to lớn apply it in a harmonious and reasonable manner suitable lớn the specific conditions và circumstances of the country. It is necessary lớn comprehensively assess the impacts on direct & indirect subjects, the economy and society to lớn avoid negative, widespread, unwanted or even adverse effects.

Alcohol, tobacco and soft drinks will be subject to an increased excise tax aiming khổng lồ improve community health & tackle the national budget deficit as part of a comprehensive tax reform strategy for 2030.

Key industry players are calling for the delay of increased taxes on alcohol & sugary drinks to tư vấn business recovery and ensure they vì not undermine economic growth.

At Off The Wall tap house & restaurant, we pride ourselves on supporting local breweries, showcasing the best craft beer và wine that Hawaii has to offer. Our knowledgeable staff can guide you through our rotating taps và curated bottle selection, ensuring you find the perfect brew to lớn suit your preferences.

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Want khổng lồ see what’s on draft?

Dive into our curated selection of local craft beers we have on self-serve tap. Our rotating assortment showcases the creativity and diversity of Hawaii"s burgeoning craft beer scene, with styles ranging from refreshing lagers & hop-forward IPAs lớn rich, complex stouts và porters. We believe in providing a rotating tap list, offering you something new & exciting lớn discover on each visit. This section is your go-to source for the latest lineup of beers on tap at Off The Wall. Whether you"re a seasoned beer enthusiast or new khổng lồ the world of craft beer, we"re confident that our draft selection will quench your thirst for unique brews!

Manoa Honey

Manoa Honey brewery is located in Honolulu. It is known for incorporating locally sourced honey into their beers, creating unique and flavorful brews.

Paradise Ciders

Paradise Ciders is specializing in handcrafted ciders made from locally grown apples and other tropical fruits, offering a taste of paradise in every sip.

Beer Lab Hawaii

Beer Lab Hawaii is a craft brewery & taproom. It is known for their experimental và innovative approach to lớn brewing, creating a wide range of unique và adventurous beer styles.

Lokahi Brewing Company

Lokahi Brewing Company is a brewery with a focus on brewing high-quality, small-batch beers that celebrate the spirit of unity và harmony among people.