Vietnam beer market faces slowdown as taxes rise and drinking habits shift: report

Vietnam’s once-frothy beer market is facing a "perfect storm" of regulatory tightening, looming tax hikes, and shifting consumer values that fundamentally reshaped the industry during the 2026 Lunar New Year (Tet) holiday, analysts with Insight Asia said in a report.

According to the Vietnam beer market and Tet 2026 consumer trend, beer volume during the holiday season was expected to contract 5.8%, reflecting a broader structural shift in the market. Total production is projected to fall to 4.15 billion liters this year, down from 4.6 billion liters in 2023. Meanwhile, anual per capita consumption may drop to about 41 liters, marking a multi-year low.

Researchers say the industry is entering what they call a “cautious celebration” era, driven by tighter regulations, economic pressure on households, and changing consumer attitudes toward alcohol.

Two major policy shifts are expected to drive the market downturn: stricter enforcement of drink-driving regulations and a planned increase in excise taxes on alcoholic beverages.

Vietnam’s government is expected to raise the excise tax on beer from 65% to 80% in 2026, a move that analysts estimate could push retail prices up by 18-22%. Consumers are already adjusting their behavior. Surveys indicate 38% of drinkers plan to cut back once higher prices take effect.

At the same time, stricter enforcement of zero-alcohol driving rules has significantly changed where people drink. About 82% of consumers now avoid alcohol when they need to drive, contributing to a 55% decline in on-premise consumption at restaurants and bars.

As bar and restaurant consumption falls, home drinking has surged. Beer consumed at home now accounts for 67% of Tet beer volume, up sharply from 45% in 2019. The shift has transformed distribution channels and marketing strategies for brewers.

In addition, several trends are becoming more pronounced during this Tet. The first one is off-trade dominance. About 78% of Tet beer purchases now occur through supermarkets, convenience stores and e-commerce platforms. The second is digital research and buying. In major cities, 35% of consumers research or purchase beer online.

The last is selective premiumization. Despite the drop in overall volume, the premium segment is expected to capture 35.5% market share, as consumers buy fewer products but choose higher-end brands for special occasions.

Regarding market shares, local brands dominate everyday consumption, and the market remains heavily influenced by domestic brewers. Sabeco (HoSE: SAB) maintains strong brand recognition, with 84% unaided awareness and 72% purchase consideration among consumers.

For everyday family gatherings, drinkers tend to favor mainstream brands such as Saigon Beer, 333 Beer, and Hanoi Beer, which together account for about 52% of the average Tet beer budget of VND3.8 million ($145). Premium imported brands, however, dominate gifting occasions. Purchase consideration is highest for Tiger Beer (56%), Heineken (51%), and Budweiser (28%).

Attempts by brewers to promote non-alcoholic alternatives have so far struggled. Surveys show 82% of consumers reject non-alcoholic beer, arguing that “without alcohol, it’s not beer.” As a result, penetration remains limited at around 4.2%.

The report shows that the Vietnamese beer market is increasingly divided into three key consumer segments: (i) value seekers (42%) – highly price-sensitive drinkers who buy mainstream brands in bulk for family gatherings; (ii) quality conscious (36%) – consumers who mix mainstream and premium brands to balance quality and budget; and (iii) premium seekers (22%) – status-driven buyers who spend heavily on gifts and allocate about 82% of their budget to premium brands.

Meanwhile, generational change is reshaping long-term demand. Around 52% of Gen Z and Millennials say they are trying to drink less, reflecting a broader moderation trend.