Alcohol laws experience overwhelming backlash

The draft law on preventing and fighting against harms of wine and beer’s ban on beer advertisements and imposition a new financial burden on producers have hit the thumbs-down from associations, brewers, and lawmakers alike.

The Ministry of Health is proposing a draft law on preventing and fighting against the harms of wine and beer consumption to the National Assembly (NA) for consideration in lawmaking for 2018.

However, many NA deputies, lawyers, and beverage producers raised objections to the draft, which includes a proposed financial contribution and a ban on advertisements, according to last week’s meeting of Vietnam Beer Alcohol Beverage Association (VBA). 

Under Article 8 of the draft, all forms of advertisements for alcoholic beverages containing 15 per cent or more alcohol by volume would be banned. Meanwhile, advertisements for wine and beer containing less than 15 per cent alcohol would be banned from means of transportation, transport sites, outdoor billboards, and websites—except for business websites.

In addition, organisations and businesses in the industry would not be allowed to fund cultural, artistic, healthcare, education, sports, or entertainment events. They would also be prohibited from sponsoring activities with their products or display their brands on mass media.

NA deputy Tran Quang Chieu, member of the Budgetary and Financial Committee, said that this regulation is unreasonable. “If the draft law is passed, many cultural, sports, and tourism events funded by businesses will be seriously affected—perhaps even scrapped altogether. If possible, the ban should focus on wine and beer sponsorships only,” he added.

Echoing Chieu’s view, Matthew Wilson, director of Corporate Affairs at Heineken Vietnam, said that the draft contradicts existing laws, specifically the Law on Advertisement and the country’s APEC commitments, and prevents customers from getting to know quality products.

“The Law on Advertisement 2012 regulates the establishment of the Advertisement Appraisal Council and co-operation with Vietnam Advertisement Association in building an advertisement code of ethics. In addition, the APEC 2014 Action Programme called on governments to intensify support in building mechanisms for the industry in advertisement activities,” he explained.

Wilson also cited a Mckinsey study with findings that, on average, 15.7 per cent of GDP growth comes from advertisements.

A 1999 report by the National Assembly of France concluded that the advertisement ban on alcohol beverages in the Loi Evin Law proved ineffective for deterring consumption of alcoholic beverages. In New Zealand, the consumption of wine and beer started to go down only after the advertisement ban for ads on TV and radio stations was removed.

The other big issue in the draft is the establishment of a community health fund, to which wine and beer producers would be forced to contribute about 1-2 per cent of their product price in the form of a special consumption tax (SCT).

Pham Trung Kien, a representative from Hanoi Beer Alcohol and Beverage JSC (Habeco), the third largest brewer in Vietnam, said that breweries are already facing difficulties due to the current 60 per cent SCT. Thus, the additional 1-2 per cent would cause further difficulties. 

Kien and other legal specialists all agreed that it is not necessary to build such a law, as the country already has 85 legal documents, ranging from circulars to laws, guiding state management and business activities governing the wine and beer industry.

“There are no countries in the world that have enacted such a law. In fact, there are only a few nations, such as Lithuania, Sri Lanka, and France, that have recently passed laws controlling wine and beer,” said Nguyen Tien Vy, vice president of VBA.

According to NA deputy Do Van Ve, wine and beer only do harm when consumers abuse them. However, this draft law focuses on banning wine and beer altogether.

“The draft has many unclear regulations and fails to thoroughly assess its impacts. We should use technical solutions to control wine and beer instead of banning it,” said Ve, who is also vice general director of beer and winemaker Huong Sen Group JSC.

Meanwhile, Wilson said that the draft law might encourage illegal imports and fake products, which are estimated to cause a large annual tax loss already.     

The wine and beer industry accounts for 11.25 per cent of Vietnam’s food production value, and 1.93 per cent of the country’s total industrial production value.

Vietnam’s beer consumption is ranked the 52nd on the world. The nation’s beer consumption per capita was 40 litres in 2016, while the total domestic wine production fell from 349 million litres in 2010 to 310 million litres in 2015.

Currently, state-owned Saigon Beer Alcohol and Beverage Corporation (Sabeco) is the nation’s largest brewer. Heineken ranks second, followed by Habeco and Carlsberg.

By Bich Thuy