The Food and Beverage Market
Entry Handbook: Vietnam
a practical guide to the market in Vietnam for European
agri-food products

Prepared by:
October 2016
Agriculture
and Rural
Development


EUROPEAN COMMISSION
Consumers, Health, Agriculture and Food Executive Agency
Promotion of Agricultural Products Unit
E-mail:


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Luxembourg: Publications Office of the European Union, 2016

PDF

ISBN 978-92-9200-739-3

doi:10.2818/258039

EB-06-16-143-EN-N

© European Union, 2016
Reproduction is authorised provided the source is acknowledged.

3


TABLE OF CONTENTS
TABLE OF CONTENTS ............................................................................................. 4
LIST OF FIGURES .................................................................................................. 6
LIST OF TABLES .................................................................................................... 7
I.

THE FOOD AND BEVERAGE MARKET ENTRY HANDBOOK: VIETNAM .................... 8
i. How to use this handbook ......................................................................... 8
1.1 Key economic figures “at a glance” ........................................................ 11
1.2 Food trade statistics, specifically showing opportunities and existing or likely
competitors to EU food exports ................................................................... 14
1.3 General information on distribution and logistics infrastructure .................. 15


2. THE VIETNAMESE FOOD AND BEVERAGE MARKET .............................................. 16
2.1 Market Size and Share ......................................................................... 16
2.2 Growth Drivers and Trends ................................................................... 20
2.3 Market Access and Entry ....................................................................... 22
2.4 Key Markets by Geography ................................................................... 26
2.5 Customs, SPS Requirements and Labelling .............................................. 27
2.6 The Status of Geographical Indications (GIs) and Intellectual Property (IP)
Protection ................................................................................................ 37
3. MARKET SNAPSHOTS FOR SELECTED PRODUCTS ................................................ 42
3.1 Wine .................................................................................................. 44
3.2 Spirits ................................................................................................ 57
3.3 Beer ................................................................................................... 66
3.4 Fresh and Processed Meat ..................................................................... 75
3.5 Olive Oil ............................................................................................. 83
3.6 Fresh Fruits and Vegetables .................................................................. 87
3.7 Processed Fruits and Vegetables ............................................................ 95
3.8 Dairy Products ..................................................................................... 98
3.9 Processed Cereals .............................................................................. 110
3.10 Bread, Pastry, Cakes, Biscuits and other bakery products ..................... 117
3.11 Chocolate and derived products and Confectionery ............................... 123
3.12 Honey ............................................................................................ 132
3.13 Gum Resin and Plant Extracts ............................................................ 137
3.14 Cotton and Live Plants ...................................................................... 143
4. COMMUNICATION .......................................................................................... 151
4.1 How does the consumer get influenced: By whom and How? ................... 151
4.2 Example of current communication campaigns made by main investor ..... 155
5. DOS AND DON’TS .......................................................................................... 157
6. SYNOPSIS .................................................................................................... 162


4


6.1 S.W.O.T. Analysis ............................................................................. 162
6.2. Key Criteria for Success ..................................................................... 165
7. SUPPORT SERVICE DIRECTORY ....................................................................... 167
7.1 European Union Organizations ............................................................. 167
7.2 Other Organisations and Service Providers ............................................ 172
7.3 EU and Vietnamese Chambers, Bodies and Associations ......................... 177
7.4 Calendar of Trade Events and Exhibitions ............................................. 179
ANNEX I: GI PRODUCTS REGISTERED IN VIETNAM ............................................... 184
ANNEX II: DATABASE OF PROFESSIONAL BUYERS ................................................ 203

5


LIST OF FIGURES
Figure 1 Map of Vietnam ...................................................................................... 10
Figure 2 Top EU-Agri Food Exports to Vietnam and their respect market shares in 2015
......................................................................................................................... 17
Figure 3 Average Tariff Rates for Industrial Products, Agricultural Products and Fisheries
in Vietnam ......................................................................................................... 19
Figure 4 Illustration of Distribution Channels in Vietnam .......................................... 23
Figure 5 Total Wine Consumption 2007-2017..............................................................
Figure 6 Vietnamese Wine Imports from the EU (2010-2014) ................................... 48
Figure 7 On trade/Off trade market share in alcoholic beverages, Vietnam ................. 55
Figure 8 Vietnamese Imports of Spirits from the EU (2010-2014) .............................. 60
Figure 9 Recorded alcohol per capita consumption .......................................................
Figure 10 Vietnamese Beer Imports from the EU (2010-2014) .................................. 69
Figure 11 Beer Market and Brand Shares (2013) ..................................................... 71

Figure 12 Distribution of Beer in Vietnam by Respective Beer Brands ......................... 74
Figure 13 Vietnamese Imports of Meat and Edible Meat Offal .................................... 77
Figure 14 Vietnamese Imports of Processed Meat .................................................... 78
Figure 15 Top Fruit and Vegetable Imports in Vietnam (2015) ......................................
Figure 16 Major Vietnamese Fruit Exports (2015) ........................................................
Figure 17 Milk Consumption per capita (2012) ........................................................ 98
Figure 18 Vietnam Dairy Exports to World (2013-2015) ...............................................
Figure 19 Percentage Share of Food Service Outlets in Vietnam ....................................
Figure 20 Vietnam's Imports of Cereal Products (2013-2015) ................................. 113
Figure 21 Chocolate and Confectionery's Retail Value Sales (2011-2016) ................. 123
Figure 22 Chocolate and Confectionery's Retail Value Sales (2011-2016) ................. 125
Figure 23 Chocolate and Confectionery's Retail Volume Sales ................................. 126
Figure 24 Vietnamese Imports of Chocolate and Confectionery from the EU (2011-2016)
....................................................................................................................... 127
Figure 25 Vietnamese Exports of Chocolate and Confectionery to the EU (2011-2016) 128
Figure 26 Vietnam Imports of Lac, Natural Gums, Resins, Gum-Resins and Oleoresins
(2005-2010)..................................................................................................... 138
Figure 27 Vietnam Exports of Lac, Natural Gums, Resins, Gum-Resins and Oleoresins 139
Figure 28 Vietnam’s Cotton Consumption in Million Metric Tons ............................... 143
Figure 29 Growth in Value of Indonesian Imports of Cotton from the EU (%p.a.) ...... 146
Figure 30 Vietnam's Imports of Live Plants from the EU (2011-2015) ...................... 147
Figure 31 Growth in Value of Vietnamese Imports of Live Plants from the EU (%p.a.) 147
Figure 32 Vietnam's Exports of Cotton Flax, hemp and Planting Materials (2011-2015)
....................................................................................................................... 148
Figure 33 Growth in Value of Vietnamese Exports of Cotton to the EU (%p.a.) .......... 148
Figure 34 Vietnamese Exports of Live Plants to the EU ........................................... 149

6



LIST OF TABLES
Table 1 Key Economic Figures ............................................................................... 11
Table 2 Vietnam's Grocery Retail Outlet by Channel, units ........................................ 25
Table 3 Responsibilities of Ministerial Bodies in Food Standards and Regulations ......... 31
Table 4 Sanitary and Phytosanitary Inspection and Export Certificates ....................... 34
Table 5 Geographical Indications Applications Filed with NOIP and Certificates Granted
from 2001 to 2014 .............................................................................................. 38
Table 6 Product Classification Table ....................................................................... 43
Table 7 List of GI Wines from the EU protected under the EU-Vietnam FTA ................. 51
Table 8 Vietnam: Spirits Sales by Category (2008-2013) ......................................... 59
Table 9 List of GI Spirits from the EU protected under the EU-Vietnam FTA ................ 62
Table 10 List of GI Beers from the EU protected under the EU-Vietnam FTA ................ 70
Table 11 List of GI Meat and Meat Products from the EU protected under the EU-Vietnam
FTA ................................................................................................................... 80
Table 12 List of GI Olive Oils from the EU protected under the EU-Vietnam FTA .......... 85
Table 13 List of GI Cheese from the EU protected under the EU-Vietnam FTA ........... 102
Table 14 Social Media Platforms in Vietnam .......................................................... 153
Table 15 SWOT Analysis ..................................................................................... 164
Table 16 Key criteria to success .......................................................................... 166
Table 17 EU Member States ................................................................................ 172
Table 18 Service providers ................................................................................. 176
Table 19 Institutions .......................................................................................... 179
Table 20 Calendar of events and exhibitions ......................................................... 183
Table 21 Major retailers ..................................................................................... 205
Table 22 Convenience stores .............................................................................. 209
Table 23 Journalists ........................................................................................... 211
Table 24 Bloggers ............................................................................................. 211

7



Tastes of Europe Vietnam – Market Entry Handbook

I.

THE FOOD AND BEVERAGE MARKET ENTRY HANDBOOK: VIETNAM

This Handbook is intended to act as a reference for those agri-food producers planning
for, or in the process of entering, the Vietnamese market. This Handbook provides stepby-step guides on the operationalization of the market in Vietnam, including relevant
information such as analysis of the Vietnamese market for different product categories,
market access and market entry procedures, IP protection, referrals to professional
buyers and a signposting and referral system providing useful contacts and ways to
penetrate the Vietnamese market.

i. How to use this handbook
Depending on your stage of market entry, company profile, and product range, different
sections within this handbook will be helpful to a different extent for your business
strategies.
For those wishing to learn more about the Vietnamese food and beverage market in
general Section 2 provides an overview of the business climate. This section contains
information on: the food and beverage market, market access procedures, customs
procedures, SPS and labelling requirements, and the status of Geographical Indications
and Intellectual Property protection. The information contained within this section is of a
general nature and so may not be relevant for those in the more advanced stages of
market entry.
If Section 2 got you interested in the market but you want to find out more information
relevant for your product then check out the Market Snapshots for Selected Products.
This content illustrates the market situation, market access procedures, SPS
requirements etc. specific for this product or product category. This information will
provide more industry specific information to consider as part of any market entry or

market expansion strategies.
If you already have decided that the Vietnamese market is where you want to be, but
you need some support, then the Support Services Directory can point you in the
right way. Contact information for a service provider, business facilitation support
organisation, or from a business contact, could help put you in touch with the right
parties who can help you to build your brand in the Vietnamese market.

8


Tastes of Europe Vietnam – Market Entry Handbook
1. VIETNAM FACT SHEET

9


Tastes of Europe Vietnam – Market Entry Handbook

Figure 1 Map of Vietnam

10


Tastes of Europe Vietnam – Market Entry Handbook
1.1 Key economic figures “at a glance”
Socialist-oriented market economy
GDP
(Billions of
Euros)
Real annual GDP

growth
Forecast GDP
growth for 20162018
GDP by sector

GDP per capita
(EURO)
Inflation
Principal exports
& main
destinations
Jan-Apr 2016
Principal imports
and main regions
Jan-Apr 2016

2011
96.7

2012
121.1

2013
128.4

2014
139.9

2015
172.6


6.0% in 2014
6.7% in 2015
East-Asia Pacific: 6.5% in 2015. Expected rate: 6.2% from 20162018.
Vietnam’s GDP is projected to grow at an average rate 6.3 % in
2016-2018.
For the first half of 2016, the agriculture, forestry and fishery
sectors accounted for 16.73% of growth; industry and construction
accounted for 33.45%; services accounted for 39.61%;
Average goods sales tax applied (excluding subsidies) were
10.21%.
2011
2012
2013
2014
1,384.9
1,575.1
1,712.5
1,842.4
4.1% in 2014.
0.6% in 2015.
Telephones, textiles and garments, computers, electrical products
and spare parts, fishery products, coffee.
EU28 (21.7%); United States (21.2%); China (13.4%); Japan
(8.1%); South Korea (5.2%).
Machine, equipment, tools, computer, electrical products, textile,
telephone, iron and steel.
China (34.7%); South Korea (14.5%); Japan (6.6%); Singapore
(6.3%); EU28 (5.0%)


Table 1 Key Economic Figures

Source: The World Bank, IMF, EUROSTAT, Statistics Office of Vietnam, Vietnam Customs.

Vietnam is a developing economy with bright middle- and long- term growth prospects.
Key economic indicators consistently showed positive performance during the last
decade and Vietnam’s GDP grew at an average of 7.26% between 2000 and 2010.1 The
current outlook reflects a successful - albeit ongoing - evolution from a centrally-planned
economy into a more dynamic, market-oriented system. Nevertheless, Vietnam remains
far from becoming a liberal economy: government subsidization and stated-owned
enterprises are still major determinants. At the same time, strict central control can still
encumber free growth in this so-called “socialist oriented market economy.”
Recent economic development has nonetheless delivered positive societal impacts. Rapid
urbanization and improvement of living standards have reduced levels of poverty and
exclusion from 20.7% in 2010 to just over 13% in 2014.2 The Vietnamese population is
now, on average, better educated and has a higher life expectancy than most countries
with a similar per capita income.
1

"Vietnam’s Socio-economic Development Strategy for the period of 2011-2020" available at
/>2
"Vietnam” available at />
11


Tastes of Europe Vietnam – Market Entry Handbook
Still, while the government aims to further industrialise the country, agriculture
nonetheless accounts for 30-35% the labor force. This sectoral composition can restrain
productivity levels and create gaps in supply of trained workers for other sectors. It is
estimated that, despite occupying up to a third of Vietnam’s labor force, the domestic

agriculture industry only accounts for one-fifth of GDP.3 Efforts are currently in place to
improve Vietnam’s competitiveness regionally and internationally.
In 2010, the Government of Vietnam released its Socio-Economic Development Strategy
for the Period of 2011-2020. The strategy is a logical continuation of the “Doi Moi”
policy, which during the last twenty years gradually empowered private enterprise and
market forces. The current plan aims to work towards sustainable growth and
development, mainly by tackling remaining issues such as an existing network of largely
underdeveloped infrastructure, bureaucracy and serious corruption claims. 4 These
measures aim to create favorable conditions for the private sector to become a driving
growth force in the coming years. Vietnam’s ranking in the World Bank’s Ease of Doing
Business annual review was 90 (out of 189 economies).5
Foreign investments are particularly encouraged by the Government of Vietnam.
However, this is caveated by several sectors wherein the government maintains local
protectionism and favoritism, in particular for agriculture. Controlling inflation is also an
important objective to maintain sustainable growth. Inflation is expected to grow from
3% to 4% in 2017, thereby deflating demand slightly over the next year. Nevertheless,
the current outlook remains positive. 6 In spite of cultural tendencies predisposing
towards financial savings, Vietnamese consumers are very optimistic, ranking the fifth
most optimistic country globally. 7
Rising disposable incomes have further increased consumer demand for international
products; consumer expenditure on Food and Beverages (F&B) is growing well ahead of
several other product categories. From 2010 to 2015 disposable income increased (in
real terms) by 32%, creating new opportunities for European exporters. In turn,
consumer spending increased 33% over the same period, driven in large part by
expenditures from a burgeoning middle-class. 8 Vietnam’s middle- and high- income
groups are expected to double in size by 2020; these consumers are willing to pay more,
particularly for healthy and ecological products.9 By some estimates, for example, nearly
one third of consumers cite health as their biggest and second biggest concern driving
food choices and habits. 10


3

“US-Vietnam Economic and Trade Relations: Issues for the 114th Congress” available at
/>4
"Vietnam’s Socio-economic Development Strategy for the period of 2011-2020" available at
/>5
“Doing Business: Ease of Doing Business in Vietnam” available at
/>6
“Vietnam Economy” available at />7
“Vietnam Consumer Confidence Index continues maintaining at high level in Q1’2016“available
at />16_EN_Final.pdf
8
“Consumer Lifestyles in Vietnam” available at />9
“Vietnam and Myanmar: Southeast Asia’s New Growth Frontiers” available at
/>southeast_asia_new_growth_frontier/?chapter=2
10
“Vietnam Consumer Confidence Index continues maintaining at high level in Q1’2016” available
at

12


Tastes of Europe Vietnam – Market Entry Handbook
During the next decade, Vietnam’s economy will see even deeper integration into the
regional and global economy, as well as increasing demand for foreign products at least
partly in tandem with an influx of foreign investment. Continued macroeconomic
liberalization and further government cooperation will be essential to sustaining this
trajectory.

/>_EN_Final.pdf


13


Tastes of Europe Vietnam – Market Entry Handbook
1.2 Food trade statistics, specifically showing opportunities and existing
or likely competitors to EU food exports
Vietnamese consumers dispense a sizeable portion of their income on food items. 11 More
than half of total expenditures are for food, mostly basic food items like rice, salt, sugar,
meat, vegetable oil, and sauces. The average household spends very little on high-value
processed food products. Nevertheless, recent consumer surveys point to an increase in
spending on high-value F&B.
Trade data indicate that Vietnam imported over 8.03€ billion in consumer-oriented
agricultural products in 2014, which includes more than 3.46€ billion in edible fishery
products, the single largest category.12
Of the EU’s 2015 export basket to Vietnam, agricultural products accounted for 12.9% of
the total value.13 On the other hand, Vietnamese agri-food exports to the EU accounted
for 7.6% of total Vietnamese exports to the EU. These amounted to approximately 2€
billion. The top five EU agri-food exports to Vietnam and their respective market shares
in 2015 were pet food (9.1%); malt (7.7%); spirits, liqueurs and vermouth (7.3%); and
milk powders and whey (7.1%).
In 2015, the main exporters to Vietnam and their respective market shares were: China
(34.7%); South Korea (14.5%); Japan (6.6%); Singapore (6.3%); and the European
Union (5%).14
Presently, the best prospects for consumer-oriented agricultural products in the
Vietnamese market include dairy products, chilled and frozen meat, frozen poultry, fresh
fruits, dried fruits and nuts, snack foods, confectionary foods, packaged foods,
condiments, juices, and alcoholic drinks.15

11


“Vietnam Exporter Guide” available at
/>12
Ibid.
13
“European Union, Trade in Goods with Vietnam” available at
/>WAR_NavTreeportletprod_INSTANCE_yMiooQ47vf0e&p_p_lifecycle=0&p_p_state=normal&p_p_mo
de=view&p_p_col_id=column-2&p_p_col_count=1
14
“Vietnam” available at />15
“Vietnam Exporter Guide” available at
/>
14


Tastes of Europe Vietnam – Market Entry Handbook
1.3 General information on distribution and logistics infrastructure
The first step to doing business in Vietnam is to identify a local import partner or
representative, or to otherwise develop a relationship with one of the established food
trading and distribution companies. Such distribution companies are able to extend the
distribution network to not only supermarkets, hotels and restaurants, but also wet- and
open-air markets, independent and specialty retail shops.16 Currently, there are only a
handful of well-organized food trading and distribution companies in Vietnam suited for
imports of EU agri-foods. These companies tend to be somewhat transient, so it is
advisable to visit Vietnam and research the company’s customer lists and achievements
before market entry.
Vietnam’s retail food landscape is largely dominated by traditional wet markets and
small independent stores ideal for small-quantity, high-frequency food purchases.17 With
low rental and operations costs, traditional retailers benefit from offering convenience,
package-size flexibility and low prices, especially for fresh food. Modern grocery retail

accounts for only 15% of overall grocery sales in Vietnam whereas traditional retailers
account for 85%. However, the modern retailers channel is expected to grow at a
compound annual growth rate (CAGR) of 11.5% until 2019.
Vietnam’s limited distribution infrastructure and facilities for perishable products are
significant constraints to market entry for EU products. Vietnamese distribution systems
are often equipped with out-of-date technology, and companies often utilize inadequate
or fragmented cold chains where foodstuffs are at higher risk for improper handling.
Sea and air are the more used shipping options for entry of goods in Vietnam. Haiphong,
Da Nang and Saigon are most frequented international seaports, and Noi Bai and Tan
San Nhat are busiest international airports in Vietnam.

16

“Vietnam Exporter Guide” available at
/>17
“Sector Analysis: Vietnam: Agriculture and Food” available at
/>g%20sektorer/Vietnam/Vietnam%20Sector%20Analysis%20Agriculture%20and%20Food%20July
%202015.pdf

15


Tastes of Europe Vietnam – Market Entry Handbook

2. THE VIETNAMESE FOOD AND BEVERAGE MARKET
2.1 Market Size and Share
Vietnam has a population of approximately 92 million people (13th largest in the world),
which is expected to grow to 100 million by 2020 at an annual growth rate of 1.2%. 18
Vietnam is one of the fastest growing countries in ASEAN, with an average GDP growth
rate of around 6% between 2000 and 2014. Its economy is projected to continue to

grow by 6.2% in 2016. 19 Projections for economic and population growth signal
increased opportunities for EU imported goods in the Vietnamese market.
As Vietnamese consumers spend more as a portion of overall income than comparators
and are benefitting from aggregate income growth, they are increasingly likely to spend
on high-value foods such as dairy products (UHT and fresh milk, yogurt, cheese etc.)
meats, eggs, fresh fruits, imported vegetables, confectionary, snack foods, and
packaged food items. Across these product categories, the EU is recognized as a reliable
producer and exporter in terms of quality, safety, nutrition, and taste.
Vietnam’s total imports of agricultural, fish and forestry products were estimated at
around 24.01€ billion in 2014. Whereas EU Member States have traditionally been
significant trading partners for Vietnam, they are likely to face new and increased
competition from entering and established agri-food producers in the region and
internationally. Leveraging product reputation and in-demand categories of EU agri-food
exports will be vital for maintaining healthy trade with Vietnam as it continues to grow.

EU-Vietnam Bilateral Trade
Vietnam is a relatively self-sufficient country in terms of food production. As disposable
incomes continue to grow - in turn driving technology and infrastructure improvements imports are, however, expected to rise. Importantly, the market for high-value food
products in Vietnam is substantial and is growing across a wide variety of categories.
European products stand to benefit from such growing trends, and must position
themselves appropriately to maximize potential business opportunities.
In 2015, total trade in goods between the EU and Vietnam amounted to 38€ billion.20
Total EU imports from Vietnam amounted to approximately 30€ billion, while total
exports from the EU to Vietnam accounted for approximately 8€ billion. It is important to
note that over the period 2011-2015, the EU’s exports to Vietnam increased by 25%.
These figures exclude trade in services and bilateral investment flows.

18

“Doing Business in Vietnam” available at

/>_Vietnam_16000319.pdf
19
“Guide to the EU-Vietnam Free Trade Agreement” available at
/>20
“European Union, Trade in Goods with Vietnam” available at
/>WAR_NavTreeportletprod_INSTANCE_yMiooQ47vf0e&p_p_lifecycle=0&p_p_state=normal&p_p_mo
de=view&p_p_col_id=column-2&p_p_col_count=1

16


Tastes of Europe Vietnam – Market Entry Handbook
The EU is Vietnam’s second largest trading partner after China.21 After the US, the EU is
second largest export market for Vietnam. Since 2015, Vietnam has been the EU’s
second largest trade partner among the 10 ASEAN member countries (after Singapore)
and, amongst them, the largest exporter of goods to the EU.
In 2015, the main exporters to Vietnam and their respective market shares were: China
(34.7%); Korea, Republic of (14.5%); Japan (6.6%); Singapore (6.3%); Hong Kong,
China (5.2%); and the European Union (5%).22
As it relates to the EU’s exports to Vietnam, agricultural products accounted for 12.9% of
its total exports in 2015. 23 These exports amounted to approximately 1€ billion. On the
other hand, Vietnamese agri-food exports to the EU accounted for 7.6% of total
Vietnamese exports to the EU. These amounted to approximately 2€ billion.
The top five EU agri-food exports to Vietnam and their respective market shares in 2015
were:
1.
2.
3.
4.
5.


Raw hides, skins and furskins (12%);
Pet food (9%);
Malt (8%);
Spirits, liqueurs and vermouth (7%); and
Milk powders and whey (7%).

Figure 2 Top EU-Agri Food Exports to Vietnam and their respect market shares in 2015
Source: COMEXT-EUROSTAT

21

“Guide to the EU-Vietnam Free Trade Agreement” available at
/>22
“Vietnam” available at: />23
“European Union, Trade in Goods with Vietnam” available at:
/>WAR_NavTreeportletprod_INSTANCE_yMiooQ47vf0e&p_p_lifecycle=0&p_p_state=normal&p_p_mo
de=view&p_p_col_id=column-2&p_p_col_count=1

17


Tastes of Europe Vietnam – Market Entry Handbook
The EU-Vietnam Free Trade Agreement
On December 2, 2015, European Commission President Jean-Claude Juncker and former
Vietnamese Prime Minister Nguyễn Tấn Dũng announced that the EU and Vietnam had
concluded negotiations on a free trade agreement (FTA). The Vietnam agreement is
considered among the most ambitious and comprehensive FTAs that the EU has
concluded to date with a middle-income country.24 As such, it sets a new benchmark for
Europe’s engagement with emerging economies. The FTA is expected to enter into force

in 2018.
The EU-Vietnam FTA has already achieved widespread coverage with 65% of EU exports
to Vietnam entering duty- free from ratification. The remaining trade – with the
exception of a few products – will be liberalized after 10 years. The EU will liberalize 71%
of its imports from Vietnam from entry-into-force of the agreement and 99% will enter
duty-free after seven years.
Custom duties will be removed over a transitional period (of a maximum period of seven
years for Vietnamese goods and 10 years for EU goods) so that domestic producers can
gradually adapt. Consumers from both sides will benefit from lower prices and exporters
from strengthened competitiveness. Some examples of EU agricultural exports that will
benefit from tariff elimination in Vietnam include the following:
•
•
•
•
•
•
•

Frozen pork meat will be duty free after 7 years;
Dairy products will be duty-free after 5 years;
Food preparations will be duty-free after 7 years;
Chicken will be fully liberalized after 10 years;
Liberalization as at entry into force for salmon, halibut, trout and rock lobster.
Other fisheries are scheduled for liberalization after 3 years;
Wines and spirits will be liberalized after 7 years; and
Beer will be liberalized after 10 years.

24


“Political and Economic Relations” available at:
/>
18


Tastes of Europe Vietnam – Market Entry Handbook

Figure 3 Average Tariff Rates for Industrial Products, Agricultural Products and Fisheries in
Vietnam
Source: Guide to EU-Vietnam Free Trade Agreement

Figure 3 above reveals the average tariff rates for industrial products, agricultural
products and fisheries in Vietnam and the process by which tariffs will be eliminated on
EU products over the ten-year transitional period. It is important to note that average
tariffs on agricultural products will be reduced from 67.7% from entry into force of the
agreement to 2.6% in the tenth year. The average tariffs on fisheries will be reduced
from 86.7% from entry into force of the agreement to no tariffs in the seventh year.

EU GIs in Vietnam
Over the last ten years, only 47 Geographical Indications (GIs) have been registered in
Vietnam. Recently, however, GI registrations have become more popular; foreign GI
associations are now more likely to register GIs in Vietnam as law-enforcement are
becoming more sophisticated and more aware of IPR, particularly for foreign rights
holders.
Currently Vietnam has registered 2 GIs from the European Union countries. These are
Cognac from France (Registration No. 00003) and Scotch Whiskey from Scotland
(Registration No. 0023). Furthermore, the EU-Vietnam FTA contains comprehensive
provisions on the mutual protection of GIs. Vietnam has agreed to protect169 GIs from
the European Union countries.


19


Tastes of Europe Vietnam – Market Entry Handbook
2.2 Growth Drivers and Trends
Vietnam’s retail food sector is growing rapidly, fueled by a combination of strong
economic growth, rising income levels (particularly disposable income), a large young
population, a growing middle class, and increasing exposure to a Western lifestyle. 25
More and more urban consumers are opting for an international shopping experience,
shifting from the traditional “Wet” markets to supermarkets and shopping malls. This
trend has been a driving force in increasing imports of Western food products.
Rising income levels
Rising disposable incomes in Vietnam have resulted in an increased demand for premium
products. Despite a recent slowdown, Vietnam experienced strong period growth in
disposable income between 2006 and 2011. The highest income class, with tax
designation as “Social A” class, is expanding and seeking more premium products.
Consumption of indulgences such as ice cream and wine are increasing, as well as
higher-priced health and wellness options - especially functional foods and beverages.
These consumers are also willing to pay considerably more for basics, such as vegetables,
that are deemed free of contaminants.26
A youthful population and a rising middle class
Vietnam’s consumer market is still in the early stages of development but has been one
of the fastest growing markets in Southeast Asia due to a youthful population, continuing
strong economic growth, and rising disposable income. Over 50% of the population is 25
years or younger.27 International fast food chains continues to strengthen its presence in
Vietnam, appealing to young consumers. There is also a growing middle class in Vietnam,
where both parents are working and less time is available for food shopping.
An increase in the number of “working” women
Vietnam now boasts an increase in the number of women in the workforce with
increased disposable incomes to purchase higher-value food products for their children

and families.
Growing health consciousness pervades many food categories
Government health improvement campaigns are helping to increase consumption of
healthy foods, boosting fresh foods like nuts, seafood, fruits and vegetables. 28 In frozen
and packaged food, health and wellness is also gaining in popularity, as consumers
become more sophisticated in their understanding of healthy eating and manufacturers
increasingly advertise the health benefits of their products. Still an emerging trend,
healthy eating has plenty of room for growth.
Shift from Traditional “Wet” Markets to Supermarkets and Shopping Malls
25

“Vietnam Exporter Guide” available at
/>26
“Market Opportunity Report: Vietnam” available at />27
“Doing Business in Vietnam” available at
/>_Vietnam_16000319.pdf
28
“Market Opportunity Report: Vietnam” available at />
20


Tastes of Europe Vietnam – Market Entry Handbook
Coming from a low base, demand for imported packaged and frozen foods will likely
grow, as Vietnamese continue to gain exposure to popular food items from the West
through modern grocery shops.29 In addition, improvements to cool chain technologies
will expand distribution of frozen foods and seafood throughout the country. Lastly, there
are opportunities for EU producers to replace China, which is losing share as a result of
contamination scandals, as the supplier of a number of food items.

29


Ibid.

21


Tastes of Europe Vietnam – Market Entry Handbook
2.3 Market Access and Entry
This section provides details on the requirements for entry into the Vietnamese market,
explaining where market access restrictions exist and what procedures are needed to
overcome them.

Market Entry
Market entrants to Vietnam will need to first identify a local partner, representative, or
importer with good understanding of the domestic market. This will need to be a trusted
and co-interested party who, in turn, will be able to advise on distribution and liaise with
public officials (customs, food inspection, and others) in order to develop reliable market
entry avenues.
Vietnam is a market where personal relationships are important. 30 This requires an
investment primarily of time and personal presence. Likewise, product training for the
agent's workforce is essential, as are regular updates on developments, modifications,
competitor activity, etc. Therefore, regular visits to the market, especially during the
early phase, are an important part of a successful interaction with the agent / distributor.
Legal issues can be very complex, a local lawyer is considered essential. Presently
foreign companies are commonly subjected up to 15 bureaucratic inspections per year,
as well as to some occasional, unclear and complex administrative licensing
procedures.31
Corruption is not only a widespread obstacle, but “a part of the game” that has to be
accepted by most companies, since it is much easier way than a lingering and
unproductive controversy. Favoritism is sometimes practiced by authorities towards local

state-owned enterprises.32

Distribution Channels
Distribution of imported foods in Vietnam follows one of the four basic models as follows:
1) Exporters ⇨ Importers/Distributors ⇨ Big Modern Retailers
2) Exporters ⇨ Importers/Distributors ⇨ Wholesalers ⇨ Retailers
3) Exporters ⇨ Local Agent ⇨ Importers/Distributors/Wholesalers ⇨ Retailers
4) Exporters ⇨ Big Modern Retailers (Metro, Saigon Coop, Big C, Maximart, Citimart,
Fivimart)

30

“Doing Business in Vietnam” available at www.iberglobal.com/files/vietnam_ukti.pdf
“Agrofood Research Report” available at:
/>1141118112431_1.pdf
32
Ibid
31

22


Tastes of Europe Vietnam – Market Entry Handbook

Figure 4 Illustration of Distribution Channels in Vietnam
Source: USDA Foreign Agricultural Service Global Agricultural Information Network: “Vietnam
Retail Foods Sector Report”

The first and second modes are the most common channels of distribution in Vietnam.
Most food importers in Vietnam are also distributors. They often directly move their

imported products to big retailers in urban areas, and let wholesalers and their agents
help distribute their products to the thousands of small retailers in both urban and rural
areas. Due to relatively low purchasing power, most modern retailers source through
importers and distributors. Only a few big chains like Metro, Big C, Coopmart (Saigon
Co-op), Fivimart, Maximart and Citimart have tried buying directly from foreign suppliers.

Retail Channels
Local chains still dominate the market but foreign-invested retailers are also very quickly
expanding, creating a competitive environment in the modern Vietnamese retail sector. 33
Vietnam’s retail food landscape is largely dominated by traditional wet markets and
small independent stores ideal for small-quantity, high-frequency food purchases. With
lower rental and operation costs, traditional retailers benefit from offering convenience,
package-size flexibility and low prices, especially for fresh food. Traditional retailers for
the virtual totality (c. 95%) of grocery sales, with a now emerging modern retail grocery
presence. Modern retail channels account for around 20 % of total sales in Vietnam.
33

“Vietnam Retail Foods Sector Report” available at
/>
23


Tastes of Europe Vietnam – Market Entry Handbook

Vietnam Traditional Wet Market

Modern retailers (supermarkets, hypermarkets, mini-marts, convenience stores, and
department stores) appeal to a growing number of consumers in many key urban areas
(Hanoi, Ho Chi Minh City, Hai Phong, Danang, Can Tho, Nha Trang, Quang Ninh, Binh
Duong).

In Vietnam, Big C is the only brand name of hypermarkets. Metro Cash & Carry stores
give the impression of hypermarkets but are not. Metro’s clients are mostly industry and
wholesalers while hypermarkets’ are final customers. Big C is present only in Hanoi, Ho
Chi Minh City, Hue, Da Nang, Vinh, Nam Dinh and Vinh Phuc. Because of its size, Big C
stores are usually located on the outskirt of the city.
Supermarkets, whose retail prices are a bit higher compared with a hypermarket, are
better fitted for regular, personal consumers. Some of the most famous supermarket
names in Vietnam are: Intimex, Co.opmart, Fivimart and Citimart. Supermarkets in
Vietnam offer more or less similar goods and services.

Supermarket brands, Vietnam

In Vietnam, the modern retail trade concept has grown tremendously in recent years,
going from only 2 supermarkets in the early stage (1996/1997) to more than 420 in
2012. Before 1996, open-air wet markets and non-staple food small private shops were
the norm, yet in the most recent decade, Vietnam’s urban economy has begun a steady
transition away from the traditional trade to modern trade. Most of the supermarkets
and shopping centers (department stores) are based in Ho Chi Minh City and Hanoi.
Today, Hanoi has more than 38 stores, while Ho Chi Minh City has more than 65 modern
stores.

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Tastes of Europe Vietnam – Market Entry Handbook
Vietnam’s Grocery Retail Outlets by Channel, units

Table 2 Vietnam's Grocery Retail Outlet by Channel, units

25