Lao Brewery Company (LBC), majority-owned by Denmark’s Carlsberg Group, remains optimistic as Laos’ economy slows and its currency weakens. The brewer behind the iconic Beerlao continues to expand production and strengthen its leading position in the country’s beverage market.
“We are selling more than 100 litres of beverages to each Laotian a year. There is no other country, to my knowledge, that meets that,” says Henrik Andersen, Managing Director of Lao Brewery Company.
Founded in 1973 and backed by Carlsberg since 2002, Lao Brewery has grown from a small local producer to one of the country’s largest taxpayers and most successful companies. Today, its annual capacity has reached 800 million litres of beer, soft drinks, and bottled water — a massive increase from 20 million litres two decades ago.
Laos is now among Carlsberg’s top five global markets, ranking second in Asia after China. The company’s flagship Beerlao holds 90 percent of the domestic beer market, while its portfolio also includes Tigerhead bottled water, Pepsi soft drinks, and snacks such as Lay’s and Cheetos.
Despite economic headwinds and a sharp depreciation of the Lao kip — which forced prices to nearly double over two years — the brewery has continued to sell higher volumes.
“That shows there is more money in Laos than some observers might think,” Andersen notes.
The Danish-led company benefits from several local factors: a young population (more than half under 30), rising disposable income, and one of the highest home-ownership rates in Asia, leaving consumers with more to spend on food and beverages.
Competition has increased since Heineken entered the market in 2008, but Beerlao remains the preferred “working man’s beer” across the country. LBC has also begun exporting to 22 countries, mainly in Southeast Asia and China, with annual exports worth around US$15 million.
As Laos’ largest taxpayer, Lao Brewery contributed about US$250 million to state revenues last year and generated roughly US$600 million in total revenue. The company’s success, Andersen says, reflects the strength of its local partnerships and the long-term trust built between Carlsberg and the Lao government.
“There is this interdependence between the government and us that has worked out well over the years,” says Henrik Andersen.
Source: Business Times
