Da Nang-based brewer to export from 2020

Monday, October 7, 2019  09:34

The 7 Bridges Brewing Company plans to double its sales through 2020 and begin to meet export demand, Mr. Stanley Boots, Founder and CEO, told VET. “Since commencing business in April 2017, we have seen steady growth in our sales and production aligning well with the general and excellent growth of the Vietnamese beer market.”

The concept of 7 Bridges Brewing Company formed in the summer of 2016 and R&D started in September 2016. During that time, the founder was brewing test batches aiming for commercial production, which commenced in April 2017 once the license was issued. R&D is a key element of its business model and involves constant re-investment in production systems, sales outlets, and product recipes.

7 Bridges and its brewing partner, the Danang Craft Brewing Company, which handles production, have invested more than $1 million into development of a joint brewing project. Both companies saw growth of more than ten-fold in sales and production between April 2017 and August 2019.

Looking at current regulations in the industry after investing in Vietnam for many years, Mr. Boots believes frequent policy shifts pose challenge for investment in Vietnam. This is especially true in respect of detailed tax rules.

“We maintain a team of three accountants plus outsourced accountants and still find it challenging to satisfy tax filing procedures,” he explained. “Our local tax office has been helpful, but we can’t deny that the rules are complex and policies seem to shift frequently.”

“We are consulting our legal team about this. However, this stands as an example of an additional cost to doing business in Vietnam, where new decrees and circulars are released to the surprise of businesses, causing them to spend more on legal support and compliance.”

Vietnam’s special consumption tax (SCT) on beer and alcohol eats deeply into the potential margins for domestic beer sales. It is therefore rather attractive to export beer, which will then not be subject to such high taxation, for both brand growth and improving margins at the production level.

“We are looking at several regional markets for export and have already commenced exports to Singapore,” Mr. Boots said. “To continue our growth, we will need to increase capacity. This means additional investment in the brewery.

Phi Linh