Saigon Beer-Alcohol-Beverage Corporation (HOSE: SAB) reported a net revenue of 8.520 trillion VND in Q4/2023, a 15% decrease from the previous period. The gross profit margin increased from 28% to 29%.

However, factors affecting profit, such as a 7% increase in management expenses to 214 billion VND and a 50% decrease in profit from affiliated companies to 33 billion VND, despite partially offsetting this with higher financial revenue of 347 billion VND, resulted in SAB's net profit falling by 9% compared to the same period, to 947 billion VND. This is also the lowest quarterly profit for the "industry powerhouse" in Vietnam in the last two years.

In actuality, SAB had maintained a run of "profit exceeding a trillion" for five straight quarters from Q4/2021, but officially terminated this trend in Q1/2023 and repeated it in the fourth quarter of 2023.

SAB's net revenue in 2023 were 30.461 trillion VND, a 13% decrease from the previous year. Within the revenue structure, beer remains the enterprise's major product, accounting for 88% of revenue and 98% of gross profit; the beer segment's gross profit margin has risen over time, from 27% in 2018 to 34% by 2023.

Meanwhile, the packaging materials division generated 11% of sales but had a negative gross profit margin. Although beverages had a 23% gross profit margin, they generated less than 0.5% of overall sales.

Ultimately, SAB's net profit for 2023 totaled 4.118 trillion VND, a 21% decrease from 2022. As a result, the corporation only met 76% of its sales and 74% of its profit goals for 2023.

SAB's leadership cited increased competition, consumer demand, the domestic economic crisis, and tight implementation of Decree 100 as causes for the reduction in business outcomes, all of which resulted in lower sales and profits.

Similarly, Saigon Beer - Western Region Joint Stock Company (UpCOM: WSB) reported a decrease in business performance in Q4 2023. Specifically, WSB's income during this period was more than 208 billion VND, a 2.3% reduction from the previous quarter. After deducting the cost of items sold, the company's gross profit was more than 13 billion VND, a 13% decrease from the previous quarter.

During the period, revenue from the financial activities of WSB increased by 37% to nearly 7 billion VND, while expenses for this activity were not recorded. Losses in affiliated companies also increased by over 147% compared to the same period, reaching over 151 million VND. However, the company's after-tax profit still decreased by more than 21.4% compared to the same period last year, to over 11 billion VND.

WSB's total net revenue in 2023 was approximately 853 billion VND, gaining about 14.5% from the same period the previous year. After-tax profit amounted to about 80 billion VND, up more than 11% from 2022.

Unluckily, unlike SAB and WSB, Hanoi Beer - Haiduong Joint Stock Company (HNX: HAD) posted losses in the fourth quarter of 2023. In Q4/2023, HAD achieved revenue of 27 billion VND, up roughly 17.4% from the same period previous year. At the same time, the firm recorded an after-tax loss of more than 1 billion VND, compared to a profit of more than 100 million VND the previous year.

The company's leadership explained the loss-making business results by blaming the move from profit in the same time last year to a loss in this period on an increase in input material prices, while consumption declined owing to adverse weather conditions.

Furthermore, the impact of a set of governmental measures outlined in Decree 100 to address the harm caused by alcohol addiction had an influence on the company's commercial outcomes.

HAD's total revenue in 2023 was 167 billion VND, up 10% from 2022, with a post-tax profit of 6 billion VND, a 40% decrease. As a consequence, the firm met both the sales and profit objectives established for 2023.

Another firm in the Alcohol, Beer, and Beverage industry is Hanoi Liquor and Beverage Joint Stock firm - Halico (UpCOM: HNR), which owns the Hanoi Vodka brand and has consistently posted losses for dozens of quarters. HNR's net revenue in Q4/2023 was more than 32 billion VND, a 6% decrease from the previous period. The cost of items sold reduced, therefore gross profit increased to 10 billion VND, up 15% over the previous quarter. However, the company battled to avoid losses as business management and sales expenditures increased, culminating in a loss of more than 4 billion VND.

In summary, HNR's revenue in 2023 was 100 billion VND, down more than 12% from 2022, resulting in a net loss of approximately 10 billion. However, this was less than the 13 billion VND loss in the same time previous year. This is the company's eighth straight year of operating at a deficit, totaling more than 457 billion VND.

Most companies attributed the lackluster business results of beer and alcohol industry enterprises in 2023 to, aside from intense competition from industry peers, the primary reason being a decrease in consumption due to the strict implementation of Decree 100, which resulted in a decline in revenue and erosion of profits.

According to the Vietnam Beer, Alcohol, and Beverage Association (VBA), after a long period of being affected by social distancing measures, the beer industry has suffered additional impacts from Decree 100 with very stringent sanctions, causing severe damage to enterprises' production and business activities. If the Special Consumption Tax Law is altered in the future, including changes in calculating methodologies and modifications to tax rates for alcohol and beer, the condition of industrial businesses would deteriorate even further.

According to a recent analysis from Funan Securities, a big concern for the beer business is a lack of improvement in demand as individuals limit    their spending, particularly on non-essential commodities like beer and alcohol. Particularly, the decrease in spending on alcohol and beer is not just a narrative of economic troubles, but also an unavoidable trend in the future, since unhealthy beverage products will steadily diminish spending, along with legislative laws regulating people's intake of alcoholic drinks.

Not just in Vietnam, but internationally, numerous estimates show that the portfolio of non-alcoholic drinks would grow by 25% between 2022 and 2026 as beer businesses are compelled to alter their business emphasis.

Anheuser Busch InBev, the world's largest beer-selling company, predicts that non-alcoholic beer sales would account for up to one-fifth of total income by 2025. After the non-alcoholic beverage industry's overall market value surpassed $11 billion in 2022, an increasing number of beer and liquor businesses, including Anheuser, have opted to adjust their business focus to coincide with market trends.