As the Lunar New Year draws to a close in Vietnam, what will be the trend in the Vietnamese wine market in 2022?

With a population of around 96.5 million, Vietnam is becoming an increasingly important wine market. The average consumption of alcoholic beverages by Vietnamese is 1.3 litres per capita per month.

Wine is not traditionally consumed by the Vietnamese; beer is the most popular alcoholic drink.

consumed in Vietnam. However, wine consumption is becoming increasingly popular. Still wines account for 80 % of total wine sales, including nearly 70 % of red wines. Bordeaux is the Vietnamese's favourite appellation, accounting for 71% of imported French wines; Languedoc is the 2nd favourite appellation, accounting for 15%.

According to one of PWS's clients, there are 3 current challenges for French wine:

- The first was the impact of Covid: many restaurants were closed, because if there was a case of Covid, the whole district would have to close for 5 to 6 months. While the wine market was in decline, wine imports tended to fall (60.8% in value, and 40% in volume).

- The 2nd challenge is to find new trends for the wine market, which requires a great deal of effort to shape the wine market.

- The 3rd challenge is that: although there is a free trade agreement between Vietnam and the European Union (EVFTA, which came into force in August 2020), this has led to an immediate reduction in import taxes for wine; but in a second phase, the tax on special consumption including wine will increase to 150% within 10 years (our client estimates). The result is therefore contradictory: the price of French wine will become more expensive.

Even with its many challenges, the Vietnamese market is showing trends that favour French wine exports: according to BusinessFrance, Vietnam's affluent middle class currently represents 13 % of the population and is growing in importance, with an estimated 26 % by 2026. It has become "elegant" and "trendy" to drink imported alcohol. This Western-style chic and health concerns are prompting some consumers to switch from drinking beer and hard liquor to wine, which is becoming increasingly popular on the market, according to the #BusinessFrance study.

We can see that Vietnam is a dynamic market with potential, so PWS has decided to follow this market more closely in 2022.