Carlsbergs New Brewery In Laos Hit By Postponement Of Free Trade

Carlsberg’s
new Laos
brewery close to the Thai border, which cost 25 million to construct, has since
the start of the production in March 2008, only bottled beers three days a
week, writes the danish newspaper Borsen. The 180 employees spend almost as much time to shine and polish the
brewery in southern Laos,
which is build to produce beers.
    There are two obvious problems with the Carlsberg brewery,
which is located close to the border with Thailand, which can produce 200
million litres annually.
    Carlsberg in Pakse was originally designed partly to provide
Beer Lao beer for the five southernmost provinces, which have been lacking
supply of the extremely popular beer. But it rains too much. Tourists keep
away. And there is at limit for how many beers the locals can afford to by.
    The second problem is much bigger.
    Carlsberg and its co-owner, the Laotian government, aimed to
enter the Thai market, in which Carlsberg has previously had both success and
failure. Sales of Carlsberg and Beer Chang was fantastic. But the two partners
ended up first in the conflict, and then to conclude a settlement in which
Carlsberg had to buy assets of Carlsberg Asia-Chang. The assets included, among
other values, 25% of the ownership of Lao Brewery in the capital Vientiane, where
Carlsberg itself already had 25%, writes Borsen.
    Since then, Carlsberg has been waiting to come back to the
attractive thai market. And it was made possible because the 8 ASEAN countries
decided to establish free trade across borders. The problem with a brutto tax
of 60% on imported beer would disappear.
    Therefore it seems obvious that Carlsberg together with
their partner, the Laos
government, decided to build a brewery, which could brew and tap 200 million
litres of beer a year. 25% of the beers for the domestic market in the southern
Laos,
the rest for export.
    But in the middle of the construction of the new brewery,
the foundation for Carlsberg exports disapeared.
    Carlsberg’s own partner, the Laotian government, agreed
September 2007 with the then military government in Thailand, that free trade with
beers was far too sensitive.
    The part of the free trade agreement which was about beer,
were postponed. So far the year 2011.
    The postponement of free trade is interpreted differently by
Carlsberg and its local Laaos partner.
    Lao Brewery’s vice president Sounthone Phommachaj said in
September 2007:
    “This is a good agreement. Each country is trying to
protect their own markets. Now we will have time to prepare ourselves
thoroughly to export”, writes Borsen.
    Unlike felt Jesper B. Madsen, director of Carlsberg’s Asian
markets that it was still possible to export beer from the new Carlsberg
brewery.
    “There is sold already Beer Lao in Thailand, and
despite the 60% tax we can export,” said the Danish Carlsberg director.
    The sale provided an agent in Nong Khai in Thailand, the
agent occur on Beer lao´s official website, and via the Internet.
    But no matter how much is ordered from the agent who lives
650 km. from Bangkok,
or is sold by the brewers Carlsberg site, it will never be able to bring the
Carlsberg brewery costing aprox 25 US dollars up to full capacity.
    The new brewerys administrative manager, Dhammy Sintdouang
have no doubt what needs to be done.
    “Right now it is winter season. So the brewery is put
two out of five working days. And we are running only one shift. When the
season comes back, we continue as now, with only one shift, five days a week.
We can brew and tap 200 million litres of beer a year. The only thing we lack
is orders. And they can only come from one place. Namely, through sales to Thailand“,
writes Borsen.

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