Vinamilk’s organic dairy farm in Da Lat (Photo: VNA)Hanoi (VNS/VNA) - The domestic dairy industry will face competitivepressure this year due to the Comprehensive and Progressive Agreement forTrans-Pacific Partnership (CPTPP), according to a report of the Rong Viet SecuritiesCompany (VDSC).
The VDSC believes that Vietnam’s dairy brands will face fierce competition fromforeign brands because when the CPTPP came into effect in Vietnam on January14, import tariffs on dairy products from New Zealand, Singapore and Japan werecut to zero, making these product lines more competitive.
In addition, local consumers are more concerned about their own health and haveimproved awareness of nutritional products so they have become more demanding.They now prefer high-quality, organic milk products as well as those fromwalnuts and macadamia nuts. Meanwhile, demand for reconstituted milk hasdecreased, according to the report.
This is also the current consumption trend in developed markets like the US andthe European Union (EU).
However, the current high-end product line still accounts for just a smallproportion of the total milk supply in Vietnam. As much as 70 percent of milkon the domestic market is traditional reconstituted milk with much lowernutritional value than fresh milk.
The ndh.vn website quoted the VDSC report as saying that dairy companies willtake a long time to change product structures to follow market demand.
It said the long-term growth trend of the dairy industry is still positive.Milk consumption per capita in Vietnam is still at low of 26 litres per personper year compared to other countries in the region, such as 35 litres inThailand and 45 litres in Singapore.
At the same time, other factors such as the large, young, quickly growingpopulation and increasing incomes of the middle class will promote demand formilk in the long term.
To meet higher future demand, dairy processing enterprises in Vietnam haveexpanded dairy farms to increase milk supplies.
However, according to the VDSC report, companies from New Zealand, Singapore,Malaysia and Japan also want to access Vietnamese milk market, reportedvneconomy.vn.
Under CPTPP, Japan will have more access to Vietnam’s dairy market in thecoming years.
Recently, Japanese Asahi Group has co-operated with NutiFood, a Vietnamese foodand nutrition company, to set up a join venture in January that will bringJapanese nutrition products to Vietnamese children.
Shoyama Katsuo, chairman of Asahi Group Foods, said Vietnam is a potentialmarket so his group plans to bring more its products to the local market underthis joint venture.
Other global dairy brands that entered Vietnam’s market many years ago such asAbbott, Friesland Campina, Mead Johnson, Nestle and some small milk brands,have promoted investment in marketing, research and development of new productsfor the local market.
At present, Vinamilk leads in market share at about 27 percent while Abbott issecond with 17 percent, followed by Friesland Campina with 12 percent.-VNS/VNA
The VDSC believes that Vietnam’s dairy brands will face fierce competition fromforeign brands because when the CPTPP came into effect in Vietnam on January14, import tariffs on dairy products from New Zealand, Singapore and Japan werecut to zero, making these product lines more competitive.
In addition, local consumers are more concerned about their own health and haveimproved awareness of nutritional products so they have become more demanding.They now prefer high-quality, organic milk products as well as those fromwalnuts and macadamia nuts. Meanwhile, demand for reconstituted milk hasdecreased, according to the report.
This is also the current consumption trend in developed markets like the US andthe European Union (EU).
However, the current high-end product line still accounts for just a smallproportion of the total milk supply in Vietnam. As much as 70 percent of milkon the domestic market is traditional reconstituted milk with much lowernutritional value than fresh milk.
The ndh.vn website quoted the VDSC report as saying that dairy companies willtake a long time to change product structures to follow market demand.
It said the long-term growth trend of the dairy industry is still positive.Milk consumption per capita in Vietnam is still at low of 26 litres per personper year compared to other countries in the region, such as 35 litres inThailand and 45 litres in Singapore.
At the same time, other factors such as the large, young, quickly growingpopulation and increasing incomes of the middle class will promote demand formilk in the long term.
To meet higher future demand, dairy processing enterprises in Vietnam haveexpanded dairy farms to increase milk supplies.
However, according to the VDSC report, companies from New Zealand, Singapore,Malaysia and Japan also want to access Vietnamese milk market, reportedvneconomy.vn.
Under CPTPP, Japan will have more access to Vietnam’s dairy market in thecoming years.
Recently, Japanese Asahi Group has co-operated with NutiFood, a Vietnamese foodand nutrition company, to set up a join venture in January that will bringJapanese nutrition products to Vietnamese children.
Shoyama Katsuo, chairman of Asahi Group Foods, said Vietnam is a potentialmarket so his group plans to bring more its products to the local market underthis joint venture.
Other global dairy brands that entered Vietnam’s market many years ago such asAbbott, Friesland Campina, Mead Johnson, Nestle and some small milk brands,have promoted investment in marketing, research and development of new productsfor the local market.
At present, Vinamilk leads in market share at about 27 percent while Abbott issecond with 17 percent, followed by Friesland Campina with 12 percent.-VNS/VNA
VNA
