The Vietnam Chamber of Commerce and Industry (VCCI) , a leading industry group in Vietnam, has held another in a series of conferences on proposed amendments to Vietnam’s Special Consumption Tax, VN Express has reported. The proposed amendment would see tax rates on beer and alcohol rise from 65 percent to 100 percent over five years and a 10 percent tax on sugary soft drinks.
Key claims/points made in VNexpress’ article include:
- Consumers are reducing spending on beverages due to economic concerns, particularly job losses in public administration, technology, banking, and manufacturing.
- A Nielsen survey shows beer drinkers may reduce consumption or shift to drinking at home, while rural consumers are turning to lower-cost, informal alcohol options.
- Heineken Vietnam and Sabeco have proposed delaying the tax increase until 2028 and capping annual hikes at 5 percent to mitigate negative market effects.
Of course, a sharp tax increase could adversely impact the beverage industry, as businesses adjust pricing and consumers respond with changes to their drinking habits. The shift towards informal alcohol could also pose health and safety risks. That said, whereas this might pose a challenge for soft drink markers and beer brewers, a shift in consumer drinking habits could present opportunities for healthier beverage options.
See also: Is a Sugar Tax Right for Vietnam?