The recent arrest of Tran Quy Thanh, Chairman of Tan Hiep Phat, Vietnam’s largest beverage producer, and his 2 daughters, is expected to lead to changes in the domestic beverage market.
The 3 were accused of illegally appropriating property and abuse of trust to acquire property as well as tax evasion.
In Vietnam, there are a handful of major beverage players. These include 3 foreign-owned firms namely Suntory Pepsico, Coca-Cola and URC, and 2 domestic names which include Tan Hiep Phat and Masan Group. According to Virac, a market research firm, five of the largest enterprises hold 57% share of the market in 2022. Pepsico maintained its leading position in soft drink especially in carbonated drinks, fruit juices, bottled water and sports drinks. The 2nd largest player is Coca-Cola Vietnam which have strong position in carbonated drinks, bottled water and fruit juices. Tan Hiep Phat and URC Vietnam led in instant tea. Meanwhile, Red Bull Vietnam leads the Dong 18 trillion (US$770 million) energy drinks market followed by Suntory Pepsico,Tan Hiep Phat and Masan.
An analyst from Vietnam Construction Securities (VNCS) said that a scandal involving the leadership of Tan Hiep Phat will affect the face of the beverage market. He said, “When Tan Hiep Phat lacks leaders and its production capacity is affected, the company is likely to undergo a merger or be taken over. The market share of the domestic company with the next largest market share, Masan, will increase.” He added that not only Masan, but also Vinamilk and Quang Ngai Sugar (QNS) will also be able to jump into the beverage market segment to occupy the gap that Tan Hiep Phat may leave behind.
Another analyst from Tran Thi Khanh Hien said the competition in the beverage market is stiff, and the enterprises which have products similar to Tan Hiep Phat such as URC will see direct benefits immediately. Meanwhile, other manufacturers will need more time to jump on the bandwagon.
Masan, via its subsidiary Vinacafe Bien Hoa (VCF), has competed successfully with Red Bull from Thailand in the energy drink market segment and gained more market shares over the years within the energy drink, bottled water and coffee segments.
