In HCM City, food and drinks represented 17 percent of total retail revenue last year. (Photo: baotintuc.vn) HCM City (VNS/VNA) - The foodprocessing and drinks industry has seen growth of 7 percent in recent years,with more and more foreign investors deciding to pour money into the sector.
“The food and drinks sector is now taking thelargest proportion of monthly spending for the Vietnamese, around 35 percent,”Pham Thanh Kien, Director of the Ho Chi Minh City Industry and TradeDepartment, was quoted as saying in the Sai Gon Giai Phong (LiberatedSai Gon) newspaper.
In HCM City, food and drinks represented 17 percentof total retail revenue last year.
Export turnover for food processing andagricultural products totalled more than 40 billion USD last year.
Vietnamese products have successfully reachedmany technical standards and quality barriers and are present in 200 countries,including the US, Japan, the Republic of Korea and the EU.
For foreign investors, the abundance of agriculturalproducts and foodstuff in the country is an advantage. Vietnam is consideredone of the top five food baskets in the world and one of the top 15 largestcountries by agriculture exports.
The young population and the rising popularityof processed food are two other factors influencing investors’ decisions.
For the last five years, many internationalfood-processing companies have and expanded their production in Vietnam.
In the coming time, the Government plans to withdraw its shares in major food processing and drink companies likeVinamilk or Habeco and create more opportunities for foreign investors.
Foreign investors have also invested in andexpanded their trade centres, supermarkets and convenience stores, which haveall helped to increase consumption of processed foods.
Multinational retailers like Circle K, 7-Eleven,B’s mart, Family Mart, MiniStop, Big C, Aeon and Lotte now have a total of3,000 convenience stores, 300 trade centres and supermarkets in Vietnam.
“This also means more competitive pressure forthe domestic food processing and drink manufacturers,” said Ly Kim Chi, Chairwomanof the HCM City Food and Foodstuff Association.
Currently, 98 percent of domestic manufacturersare small and medium size with limited financial resources and poorcompetitiveness.
“Foreign distributors and manufacturers have astrategy to dominate the Vietnamese market. Distributors have reducedexpenditures to the producers, while the latter have dropped selling prices orincreased promotions,” she said.
“Foreign distributors have also establishedbarriers like quality and packaging standards and many others so they canrefuse domestic products,” she added.
“To compete on the home ground, domesticenterprises must increase their production capability, quality and packaging tomeet international standards,” said Huynh Thanh Dien from HCM City’s Universityof Economics.
“For long-term development, domestic enterprisesshould join international supply chains. Authorities should also apply the sameincentive policies for foreign and domestic companies,” he added.
Many foreign companies receive preferentialtreatment on land rent, taxes and technology imports.
“Authorities should also prevent unhealthycompetition when foreign enterprises work together to try to eliminate localones and engage in dumping practices,” he said.
Vietnam has 5,500 food and drink manufacturingenterprises, with 2,000 of them located in HCM City.-VNS/VNA
“The food and drinks sector is now taking thelargest proportion of monthly spending for the Vietnamese, around 35 percent,”Pham Thanh Kien, Director of the Ho Chi Minh City Industry and TradeDepartment, was quoted as saying in the Sai Gon Giai Phong (LiberatedSai Gon) newspaper.
In HCM City, food and drinks represented 17 percentof total retail revenue last year.
Export turnover for food processing andagricultural products totalled more than 40 billion USD last year.
Vietnamese products have successfully reachedmany technical standards and quality barriers and are present in 200 countries,including the US, Japan, the Republic of Korea and the EU.
For foreign investors, the abundance of agriculturalproducts and foodstuff in the country is an advantage. Vietnam is consideredone of the top five food baskets in the world and one of the top 15 largestcountries by agriculture exports.
The young population and the rising popularityof processed food are two other factors influencing investors’ decisions.
For the last five years, many internationalfood-processing companies have and expanded their production in Vietnam.
In the coming time, the Government plans to withdraw its shares in major food processing and drink companies likeVinamilk or Habeco and create more opportunities for foreign investors.
Foreign investors have also invested in andexpanded their trade centres, supermarkets and convenience stores, which haveall helped to increase consumption of processed foods.
Multinational retailers like Circle K, 7-Eleven,B’s mart, Family Mart, MiniStop, Big C, Aeon and Lotte now have a total of3,000 convenience stores, 300 trade centres and supermarkets in Vietnam.
“This also means more competitive pressure forthe domestic food processing and drink manufacturers,” said Ly Kim Chi, Chairwomanof the HCM City Food and Foodstuff Association.
Currently, 98 percent of domestic manufacturersare small and medium size with limited financial resources and poorcompetitiveness.
“Foreign distributors and manufacturers have astrategy to dominate the Vietnamese market. Distributors have reducedexpenditures to the producers, while the latter have dropped selling prices orincreased promotions,” she said.
“Foreign distributors have also establishedbarriers like quality and packaging standards and many others so they canrefuse domestic products,” she added.
“To compete on the home ground, domesticenterprises must increase their production capability, quality and packaging tomeet international standards,” said Huynh Thanh Dien from HCM City’s Universityof Economics.
“For long-term development, domestic enterprisesshould join international supply chains. Authorities should also apply the sameincentive policies for foreign and domestic companies,” he added.
Many foreign companies receive preferentialtreatment on land rent, taxes and technology imports.
“Authorities should also prevent unhealthycompetition when foreign enterprises work together to try to eliminate localones and engage in dumping practices,” he said.
Vietnam has 5,500 food and drink manufacturingenterprises, with 2,000 of them located in HCM City.-VNS/VNA
VNA
