• Vietnam's National Assembly approved an increase in alcohol tax to 90% by 2031.
• The tax on beer and strong liquor will rise to 70% by 2027.
• The higher taxes aim to curb alcohol consumption in the country.
• The beer industry, led by major brewers like Heineken, faces ongoing revenue declines.
• A new levy on sugary drinks was also announced, set to begin in 2027.

Vietnam's National Assembly has approved a significant tax hike on alcoholic beverages, raising the special consumption tax to 90 per cent by 2031. The tax will increase incrementally, reaching 70 per cent by 2027, a year later than previously proposed. This move aims to address public health concerns, given that Vietnam currently stands as Southeast Asia’s second-largest beer market, according to a KPMG report in 2024 according to Channel News Asia, Reuters, and SCMP.

The Vietnamese finance ministry indicated that the raised taxes are part of efforts to curb alcohol consumption, which has risen due to the nation’s growing beer industry. However, this decision comes at a challenging time for brewers like Heineken and Carlsberg, as financial challenges have compounded following the introduction of stringent drink-driving laws in 2019 that implemented a zero-alcohol limit for drivers. The country's Beer and Alcoholic Beverage Association has noted a decline in industry revenue over the past three years, leading companies to adapt by suspending operations at some brewing facilities, as seen with Heineken in Vietnam according to Reuters, Channel News Asia, and SCMP.

In addition to the alcohol tax increase, lawmakers have also approved a new 8 per cent levy on sugary drinks with over 5 grams of sugar per 100ml, which will take effect in 2027 and increase to 10 per cent in 2028. This indicates a broader trend in Vietnam focusing on health-related taxation as part of policy measures to address rising health concerns related to both alcohol and sugary drinks according to Channel News Asia, Reuters, and SCMP.