HANOI - Heineken, the world’s second-largest brewer, is suspending the operation of one of its breweries in Vietnam from this month due to weak demand and changing consumption patterns in the South-east Asian country, the company said on June 24.

The facility is located in the central province of Quang Nam province, it said in a statement sent to Reuters.

“The overall economy, including the beer industry, has faced numerous challenges due to the economic slowdown, which has led to a fall in consumer confidence and consumption patterns,” the company said.

Vietnam’s tighter drink and driving laws, which have restricted the alcohol content limit for drivers to zero since 2019, had also hurt beer consumption, it added.

As a result, for the first time in decades, the beer market in Vietnam saw a double-digit decline in 2023 and continued mid-single digit decline so far this year, Heineken said.

The company said the decision to “temporarily suspend” the Quang Nam brewery, the smallest of its six breweries in the country, was aimed at addressing “asset-related solutions”.

“We are seeking efficiency and economies of scale to streamline our operations, to enable us to continue investing and unlocking growth in Vietnam market,” it said, noting that some of the impacted employees would be relocated to other Heineken breweries in Vietnam.

Heineken has been operating in Vietnam through Heineken Vietnam, a joint venture with local firm, Saigon Trading Group, since 1991.

The company said it had invested over €1 billion (S$1.45 billion) in Vietnam and its breweries directly employ over 3,000 employees.

Vietnam’s finance ministry said earlier this month it was planning to hike a special consumption tax on alcoholic drinks to 100 per cent by 2030, a move that may further hurt the industry. REUTERS