VietNamNet Bridge – The food and beverage (F&B) market has witnessed big changes in recent years, with Vietnam’s most famous brands, one after another, seized by foreign investors.

Right time to sell and buy

After taking big steps to dominate the food and sauce markets, Masan started injecting money into the F&B sector when it bought 63.5 percent of Vinh Hao mineral water company, 53.2 percent of Vincafe Bien Hoa and spent VND252 billion to buy Phu Yen Beverage Company.

Masan has reaped fruits from the deals. A nine-month financial report showed that the total turnover of Masan Group was VND10.883 trillion, an increase of 44.3 percent over the same period of 2013.

Analysts commented that it is now the right time to sell and buy F&B brands.

As the competition in the F&B market is getting fiercer, the existing brands’ owners, due to a lack of resources for development, can see they may incur losses in three or five years.

Therefore, many of them have decided to sell the brands they have developed in the last many years, before they become cheaper because of losses.

As for the buyers, analysts say, it is now time to buy F&B brands, because the brands have “reasonable prices”.

They said that F&B is a profitable business sector, and deserves investment.

The analysts noted that this is probably why the US-based Mondelez International, which has two products sold in Vietnam, Oreo and Ritz biscuits, recently bought 80 percent of Kinh Do Binh Duong JSC’s shares for $370 million.

Vietnam’s spending on food and beverage products per capita is low, at just $201 in 2011. However, one report says total spending on food and beverage will be $25.2 billion in 2016, higher than the $17.7 billion in 2011, thus making Vietnam an attractive market in many investors’ eyes.

Rabbit, not scorpion

Even though they seek foreign resources to help improve corporate governance skills and financial capability, Vietnamese businesspeople continue to be afraid that they may be “swallowed” by foreign investors who would buy shares of the companies.

Bibica (sweets) and Tribeco (beverage) reportedly have nearly fallen into the hands of their foreign partners. Tribeco announced that all the activities of Tribeco Sai Gon have been implemented at Tribeco Binh Duong. However, the company has nearly disappeared from the market.

Nguyen Lam Vien, general director of Vinamit, a dried fruit maker, which now cooperates with Dole Group, said that Vietnamese companies should maintain their defences.

“You need to be sure that the rabbit carrying you on its back will not turn into the scorpion which bites you later,” Vien said.

Thanh Mai