Vietnam recorded the total value of 94.5 million USD for imported wine of fresh grapes in 2016. Western expatriates and tourists remain the biggest consumers of wines and spirits in Vietnam, although domestic drinking habits have also been changing in line with higher consumer incomes and greater exposure to Western cultures. There is a shift of consumption habits from cheap beer and whiskies to quality wines at reasonable prices. Starting from a very low level, the Vietnamese wine market has exploded, with hotels, restaurants, and retailers now offering a wide variety of wines from around the world.
The best-selling wines are reds with 65 percent of the market, followed by whites with 25 percent, and sparkling wines with 10 percent.
Current Market Trends
Successful wine shops in Vietnam offer a wider range of wines and have an attractive look. Currently, the local wine market features wines from such areas as France, Italy, Chile, USA, and Australia.
French wines tend to dominate the Vietnamese market, with Bordeaux wine the most popular.
However, as the wine market has grown in Vietnam, the dominance of the French imports has been slowly drained away. In 2007, French wine exports to Vietnam accounted for 46.8 percent of the market, while in recent years this number has dropped to around 15 percent.
While still possessing a relatively small market share, in recent years, Italian wines have found considerable success in Vietnam. In 2012, Italian wines accounted for 2.5 percent of Vietnam’s wine market; however, this was an increase of 19.7 percent over 2011. There has been similar growth in the following years as well.
Chilean wine is increasingly popular in Vietnam. The recent free trade agreement between Vietnam and Chile has helped to drastically increase the amount of Chilean wine available – the FTA lowered customs duties applicable to Chilean wines from 56 percent to 20 percent.
As imported brands spread mostly among these biggest players, it creates challenges as well as opportunities for newcomers. Brands from the UK, which now account to a very little proportion of the wine import map of Vietnam, would bring in the new wind to the entire market.
While there have been recent positive developments with regards to regulatory changes, such as the suspension of the air imports ban and the lowering of taxes on spirits imports, Vietnam still uses a range of protectionist policies that raise the cost of operating in the wine industry. Some of the key taxes that businesses wishing to import wine will find themselves subject to include:
- 50 percent customs duties on cost, insurance, and freight (CIF)
- 25 percent excise duties
- 10 percent value-added tax (VAT)
Vietnam Briefing. (2015, Febuary 25). Retrieved from Vietnam: http://www.vietnam-briefing.com/news/market-insight-vietnams-wine-industry.html/