Beer imports rise on luxury tax cut

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Beer imports have increased sharply this year even though industry insiders say local production surpassed demand for the popular beverage.

Beer imports have increased sharply this year even though industry insiders say local production surpassed demand for the popular beverage.

At Cat Lai Port, which handles 80 percent of imported goods brought into Ho Chi Minh City and neighboring provinces, beer imports have reached US$282,661 so far this year. The imports, comprising more than 33,800 cases and 40,140 bottles, rose 55.2 percent in terms of value compared to the same period last year.

Customs officials at the port said tax cuts have driven a surge in imports this year. The luxury tax rate on beer products was cut to 45 percent from 75 percent last year. It is set to be lowered further to 30 percent in 2012.

According to the Vietnam Beer, Alcohol and Beverage Association, local beer consumption is around 28 liters per person per year. There are around 350 beer production factories around the country, with more than 35 major plants that have a capacity of more than 15 million liters a year.

A major beer producer who wished to be unnamed said Vietnam's beer output has already outpaced local demand and many production lines are not running at full capacity.

Industry insiders have also questioned a recent decision by Ministry of Industry and Trade to allow a large volume of Heineken beer imports.

According to the decision, the import of 650,000 cases, equivalent to nearly 5.15 million liters, were meant for market study purposes.

However, industry insiders said the quantity was too big considering Heineken already holds a large market share and has production facilities in Vietnam. They suspect that the imports are meant for sale, given the preference among local customers for imported products.

The complaints have prompted the ministry to revoke the permission granted to Vietnam Brewery Limited, the producer of Heineken beer in Vietnam.

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