ORIENTATIONS AND SOLUTIONS TO IMPROVE WINE IMPORT ACTIVITIES OF THANH DAT IMPORT EXPORT COLTD IN THE PERIOD 20172021

BACHELOR THESIS
Major
International Economics

Topic: ORIENTATIONS AND SOLUTIONS TO
IMPROVE WINE IMPORT ACTIVITIES OF THANH
DAT IMPORT EXPORT CO., LTD IN THE PERIOD
2017-2021

TABLE OF CONTENT


ABBREVIATIONS
Abbreviations

Meaning

WTO

World Trade Organisation

ASEAN

Association of Southeast Asian Nations

AANZFTA

ASEAN-Australia-New Zealand Free Trade Area

CIF

Cost, Insuarance and Freight

VAT

Value added tax

CO., LTD

Limited liability company

FTA

Free Trade Agreement

FOB

Free On Board


LIST OF FIGURES


EXECUTIVE SUMMARY
The thesis "ORIENTATIONS AND SOLUTIONS TO IMPROVE WINE
IMPORT ACTIVITIES OF THANH DAT IMPORT EXPORT CO., LTD IN
THE PERIOD 2017-2021" was written to find out the problems of wine
importating activities and propose some solutions to improve the importation of
wine at Thanh Dat company.
The thesis is divided into three chapters. In chapter 1, I provided an overview
of the Vietnamese imported wine market as well as an overview of the company,

including the company's formation and development, functions and duties, services,
organizational structure, and current business activities, including business
products, capital and assets of the company, workforce, customers, and partners. In
chapter 2, I discussed the current state of alcohol importation at Thanh Dat
Company, including a study of the company's wine import process as well as an
analysis of the results of the company's import activities over the last 5 years,
including indicators such as wine import turnover over time, wine import turnover
by market, import turnover by wine type and import form, and a comparison of the
performance to the import plan set forth. In addition, I looked at the company's
business efficiency and competitiveness indices. Then, determine the company's
current accomplishments and limits, as well as the sources of those deficiencies.
With Chapter 3, I have come up with some ideas for the firm and some
recommendations for the government in order to enhance the company's import
operations after analyzing the present status of wine import activities at Thanh Dat
company.


INTRODUCTION
1. Rationale
Since the national program "Doi Moi" and the policy of opening up to
develop the market economy, our country has achieved many great achievements in
many fields, especially the economy, which has transformed our country from a
poor and backward country becomes a country with a developed economy, people's
living standards are increasingly improved and relations are expanded with many
countries in the world. This has confirmed one thing, opening of international
economic integration is a right step of the Government.
Only when international economic integration is effective can we create a
new position in the international market and limit unfair treatment. Participating in
international economic integration, we can take advantage of capital, advanced
techniques and technologies to meet the requirements of industrialization and

modernization of the country, besides creating favorable conditions for we are
expanding import and export markets, creating favorable conditions for product
consumption. Opening the door for integration is therefore not only for our
businesses to reach out, but also for foreign enterprises to enter into production and
business in our country.
In international economic integration, international trade is an activity field
that plays a key role in promoting the domestic economy to integrate with the world
economy. In international trade, imports play an important role in promoting trade
as well as developing the national economy. Importing helps to ensure timely,
complete and synchronous demand for production materials for production, has a
strong impact on the innovation of equipment and production technology so that
production level is improved, labor productivity is improved to catch up with
advanced countries in the world. Besides, imports also help to timely supplement
the production needs and the domestic life is still unbalanced, contributing to
improving people's living standards. Therefore, import activities in general and
import business activities in particular are very important.
Established in 2003, Thanh Dat Import-Export Limited Liability Company
was established with the main function of trading in importing wines from many
countries around the world. As one of the small and medium-sized companies
operating in the field of importing goods, in the early days of establishment the
company had to face many difficulties such as limited capital, competition with
foreign companies and big companies or finding business partners,etc. However,
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with the constant efforts of all members of the company, the company has grown up
day by day, gradually gaining the trust of customers and partners, expanded
business relationships and gained a strong foothold in the market.
Currently, the company is continuing to grow and further strengthen the
promotion of market research to promptly respond to the needs of consumers.

Through the period of internship, learning and researching how it works at
Thanh Dat company combined with the knowledge I have learned, I have done a
thesis with the topic: "ORIENTATIONS AND SOLUTIONS TO IMPROVE
WINE IMPORT ACTIVITIES OF THANH DAT IMPORT EXPORT CO.,
LTD IN THE PERIOD 2017-2021". This topic revolves around the problem of
wine importation and proposes some solutions to improve the importation of wine
at Thanh Dat company.
2. Objectives
The topic is researched with the purpose of finding out the current status of
wine import activities at Thanh Dat company and offering some solutions to
improve that activity.
Research tasks include:
-

Firstly, Overview of the Vietnamese wine market and Thanh Dat ImportExport Co., Ltd.
Secondly, the actual situation of wine import activities at Thanh Dat ImportExport Co., Ltd.
Third, Orientation and some solutions to complete wine import activities at
Thanh Dat Import-Export Co., Ltd.

3. Scope
The object of research is the importation of wine
Research scope:
Space: Wine import activities at Thanh Dat company
Time: From 2017 to 2021.
4. Methodology
The article uses historical materialism methods, statistical research, data
analysis and forecasting to analyze the current situation and propose a solution to
improve wine import activities at Thanh Dat company.
5. Research structure

6


In addition to the introduction, conclusion, and references to the topic, there
are 3 main chapters:
Chapter 1: OVERVIEW OF VIETNAMESE WINE MARKET AND
THANH DAT IMPORT-EXPORT CO., LTD.
Chapter 2: SITUATION OF WINE IMPORT ACTIVITIES AT THANH DAT
IMPORT EXPORT CO., LTD IN THE PERIOD 2017-2021
Chapter 3: ORIENTATIONS AND SOME SOLUTIONS TO COMPLETE
WINE IMPORTING ACTIVITIES AT THANH DAT IMPORT-EXPORT CO.,
LTD.

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CHAPTER 1: OVERVIEW OF VIETNAMESE WINE
MARKET AND THANH DAT IMPORT-EXPORT CO.,
LTD
1.1. OVERVIEW OF VIETNAMESE WINE MARKET
1.1.1. Introduction of Vietnamese wine market
In recent years, wine has gradually become a favorite drink of many
Vietnamese people, especially businessmen, who do jobs that often come in contact
with customers because wine makes every conversation more natural and easier.
That also helps the Vietnamese wine market as well as the world to thrive. With a
population of about 97.0 million people in 2020, Vietnam's total wine consumption
is relatively high, being the third largest wine market in the Association of
Southeast Asian Nations (ASEAN), at 15.3 million liters in 2020.
Currently, in 2020 there are more than 15 wine and other alcohol drinks
production and bottling enterprises nationwide with annual output increasing by

about 12-13 million liters. The Vietnamese wine market is also being targeted by
many French and Italian wine companies because this is the best wine consumption
market in Asia with a growth rate of 10%. By 2024, Vietnam's alcohol consumption
is expected to reach 22.3 million liters, with per capita alcohol consumption forecast
to increase to 0.3 liters per adult. Red wine dominates the wine market in Vietnam,
accounting for about 76% of total wine consumption in 2020.
According to the Vietnam General Statistics Office, in 2019, the total import
turnover of wine reached 53.2 million USD. In which, Italy, Chile and France are
the leading suppliers of wine in Vietnam market, followed by Spain, USA and
Australia, etc. The number of wines coming from these countries is increasing every
year.
1.1.1.1. Vietnamese domestic wine production capacity:
According to the Vietnam Beverages Association, there are approximately 15
wine producers operating in Vietnam with a total annual increasing capacity of
approximately 12 to 13 million liters. However, their market share is quite limited
in comparison to their foreign rivals who have built up brand awareness and have a
good reputation for quality and consistency. Vietnamese wineries such as Da Lat
Winery, which makes some of the best locally made wines, can only penetrate the
lower market segment with prices ranging from U.S. $3 to U.S. $6. In addition, the
shortage of raw materials is another problem that most local producers are facing.
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So far, the wine producers in Vietnam are mostly confined to a few regions like
Lam Dong and Phan Rang provinces, and the grapes do not seem to be of a quality
for making premium wines, according to some experts. Recently Da Lat Winery had
to import grapes and wine inputs from France to produce better quality wine.
In general, the domestic wine production capacity is still limited, unable to
meet the needs of domestic consumers. Following are some typical wine production
companies of Vietnam:

- Hanoi Liquor Co Ltd (Halico)
Halico produces alcoholic drinks in Vietnam in both wine and spirits, but it is
especially strong in spirits. In 2021 Halico produced just over 10 million liters of
wine and spirits and expected to produce 15 million liters of wine and spirits in
2022. The company is the largest spirits manufacturer in Vietnam, with its key
brands being Hanoi Lua Moi (New Rice), Hanoi Nep Moi (New Sticky Rice), and
Vodka Hanoi, a form of non-flavored vodka. In 2021 Halico controlled almost 41
percent of the spirits in Vietnam, largely due to the popularity of its flagship brand,
Hanoi Lua Moi.
The company has products in both still light grape wine and sparkling wine.
However, its presence in wine remains low in this highly fragmented environment,
and the company has not yet managed to accrue a quantifiable volume share in
wine. By investing in modern product line technology and diversifying its products,
Halico is aiming to meet increasing customer demands and serve all segments in
spirits and wine. Halico will not only concentrate on its traditional market in the
Northern Vietnam, but also plans to expand to central provinces, southern areas,
Laos and Cambodia markets. Additionally, Halico exported its premium brands to
Korea, Japan and Taiwan as well as entered the U.S. market in the last few years.
- Lam Dong Foodstuffs JSC (Ladofoods)
Ladofoods is in a good position to perform well over the forecast period,
especially with the increasingly favorable image of red wine and its health benefits.
The company is likely to also focus on its “traditional” spin to red wine, to add to
the unique positioning for its Dalat brand.
The export market has yet to become a focus for the company – instead, it is
set to intensify its promotional efforts for wine sales in the domestic market. In July
2007, Ladofoods negotiated with French strategic alliance P&P Import & Export Co
to establish the Dalat France Wine JV in order to grow grapes as well as produce
and trade wine in Vietnam.
Ladofoods is mostly famous for its wine products, with specialties in
producing and trading varieties of Dalat red wines, Dalat white wines, Dalat

strawberry wine, Dalat mulberry wine, Dankia wine, Lemon liquor, Dalat whiskey,
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Dalat rum, and Aviva wine coolers. Its grape varietal is Cardinal, which is grown in
Ninh Thuan province. The wine processing technology employed by Ladofoods
comes from Italy and Germany, thus its wine products meet international standards.
All products from Ladofoods, including wine and non-alcoholic products such as
soft drinks and spreads, are manufactured at its factory located in Dalat city. The
winery of Ladofoods had annual production capacity of three million liters in 2020,
and the company aims to upgrade its capacity to five million liters per annum in
2025. In the alcoholic drinks category, Ladofoods concentrates mostly on wine. The
company has a presence in both grape wine and local non-grape wine sectors,
although its share of non-grape wine is very small. Its key products include still
grape wines, sparkling, strawberry, mulberry, and mixed-fruit wines. Still grape
wine, particularly still red wine, accounts for the largest amount of sales.
Ladofoods’ products are mainly sold in Southern Vietnam, particularly in Ho Chi
Minh City.
- Thang Long Liquor Co
Thang Long Liquor Co is one of the largest producers (distributors) of wine
in Vietnam, falling behind Ladofoods in 2005. The company’s key brands include
Thang Long fruit wine, Thang Long Still Grape Wine, Thang Long Dry Wine,
Thang Long Sparkling Wine, and Thang Long Vodka. All of Thang Long’s products
are manufactured locally, and the majority of its sales occur through off-trade
outlets in Northern Vietnam. Thang Long Liquor Co. has a grape wine
manufacturing factory in Ninh Thuan province. It has also built a winery with
annual production capacity that is expected to reach 10 million liters in 2025 in
Ninh Thuan province, for the production of cardinal, shiraz and saw-blanc grape
varietals. Thang Long Liquor Company’s strongest presence is in Northern
Vietnam, followed by the Central Vietnam. The company’s share in South Vietnam

is rather low due to its weak distribution network and a lack of effective marketing
activities. The widespread presence of local wine companies coupled with a
growing presence of Australian still red and white wine brands, such as Jacob Creek
have hindered the company’s development in the South. Although its product types
were continuously diversified and their prices were economically positioned (retail
prices were just only from VND 27,000 to VND 50,000 per Thang Long product),
its brands still face competition from counterfeit wines. In order to improve its
competitiveness, Thang Long has decided to invest more capital in production
technology, to ensure its product quality, to demonstrate care for the environment by
setting up a new winery in Ninh Thuan, and train farmers there to ensure the good
quality of shiraz and sauvignon blanc grape varietals. It has also focused on
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branding by launching some marketing campaigns aimed at health conscious
consumers for the company’s products made from tropical fruits.
1.1.1.2. Foreign wine import capacity of Vietnam:
The value of imports of wine to Vietnam totalled $ 16.5 million in 2020.
Sales of foreign wine to Vietnam decreased by 44% in value terms compared to
2019. Imports of wine decreased by $ 12.9 million (the value of imports of wine to
Vietnam was equal to $29.5 million in 2019). Imports of wine accounted for
0.006% of total import flow to Vietnam (in 2020, total imports to Vietnam
amounted to $ 261 billion). The share of imported wine in total imports to Vietnam
decreased by 0.005%, compared to 2019 (it was 0.011% in 2019 and cumulative
imports to Vietnam were equal to $ 253 billion). Imports of wine to Vietnam in
2020 (imports of commodity group to Vietnam totalled $315 million in 2020). The
share of purchases of wine in imports of commodity group to Vietnam went down
by 4.2% compared to 2019 (it was 9.44% in 2019, and imports of commodity group
to Vietnam accounted for $312 million).
Figure 1.1: Value of imported wine of Vietnam from 2015 to 2020 (USD)

Source: Trendeconomy.com
From the chart above, it can be seen that from 2015 to 2020, Vietnam’s wine
import value has decreased ( from 22,994,898 USD in 2015 to 16,536,051 USD in
2020). It can be seen a slight decrease of 3% in 2016 compared to 2015, followed
by an increase by 2% in 2017.The year 2018 witnessed a significant growth in wine
import value with the growth rate was about 22% when compared to 2017. In 2019
the wine import value continued to increase with growth rate was 7%. However, in
2020 the value of imported wine experienced a dramatic reduce (from 29,510,209
USD in 2019 to 16,536,015 USD in 2020). Due to the fact that in 2021 the world
economy faced many difficulties due to supply chain disruptions caused by the
Covid-19 epidemic, Vietnam’s wine import scale decreased by 44%.
Table 1.1: Vietnam's top imported wine market in 2020
Market

Import value
(million USD)

Market share (%)

Italy

4.94

29.00

Chile

3.85

23.00

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France

3.74

22.00

Australia

1.85

11.20

Spain

0.688

4.16

New Zealand

0.308

1.86

Argentina

0.24

1.45

USA

0.238

1.44

Others

0.305

5.89
Source: Trendeconomy.com

Figure 1.2: Top wine exporters to Vietnam in2020
Source: Trendeconomy.com

Vietnam imports wine from many countries around the world. In the past,
Vietnam mainly imported wine from France, but recently, wine importers have
diversified their markets to meet the constantly increasing demand of domestic
customers. Wine export markets to Vietnam include Italy, France, Chile, Australia,
etc. Vietnamese people now have many opportunities to enjoy high quality wines all
over the world. In 2020, Italia ranked the first in top wine exporters to Vietnam with
4.94 million USD, followed by Chile with 3.85 million USD. France was the third
largest market withthe value of imported wine was 3.74 million USD.
In recent years, the legal procedures and import tax on wine have been

greatly reduced. Therefore, there are more and more companies importing wine on
the Vietnamese market, which makes total imported wine volume constantly
increase. Wine importers are now more and more experienced in carrying out
import processes and have imported products at very competitive prices.
According to Best wine importer, there are some the most reputable wine
importers in Vietnam:
-

The Warehouse
The Warehouse is one of the largest wine importers in the region and has
expanded over the years from Vietnam to Cambodia and Myanmar. The
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-

-

-

-

company has one of the most extensive portfolios in Asia, with over 800
wines from 14 countries (all major wine-growing regions are covered). The
Warehouse also hosts a diverse portfolio of spirits.
T.K. Distribution Corporation
T.K. Distribution has been operating for almost 25 years, providing a mix of
sake and wines. T.K. is an exclusive importer for some prestigious wine
brands and is working closely with top restaurants, hotels and resorts in
Vietnam.

Da Loc Fine Wines & Spirits
Da Loc was established in 1995 and is one of the oldest and best known wine
and spirits importer in Vietnam. During this period the company evolved to
offer over 700 wines and spirits from all over the world, from high end
brands to smaller, unique products. The company operates mainly in Ho Chi
Minh, Hanoi and Danang and partners with HORECA, as well as
supermarkets and wholesales. Chilean and French wines are very well
represented in Da Loc’s portfolio.
Vinifera
Vinifera started its import business in 2002 and offers wines and spirits (Gin,
Absinthe, Cognac, Calvados). Wines are imported from the world’s main
regions Italy, France, Spain, Portugal, Chile, Argentina, USA, Australia,
New Zealand and South Africa.
Sola Hung Thinh
Sola is a Vietnamese wine and spirits importer that has been operating in the
market for many years and focuses mostly on more affordable New World
wines. This doesn’t mean that its portfolio doesn’t include brands from the
main wine regions.

With the current growth of Vietnam's economy and the improvement of
people's living standards, the development of the wine industry will have a lot of
potential to penetrate. In the short term, with the impact of the covid epidemic, the
sale of wine in Vietnam will be significantly reduced. But recently, the epidemic has
been controlled, so the Vieeth Nam wine market will have a strong recovery and
development.
In the long-term, the Vietnamese market will become a lucrative source of
income for domestic and foreign wine businesses to target when Vietnam is on the
verge of outstanding development in many aspects. People's life and culture also
change and improve to adapt to the international. Western cultures are also widely
spread to influence the thinking of Vietnamese people. In addition, the mindset of

women in Vietnam has changed markedly and their demand for alcohol is higher
13


than that of men. Therefore, the wine market, especially imported wine, will
become extremely developed in the future.
1.1.2. Characteristics of the Vietnamese wine market
1.1.2.1. Drinking culture and wine consumption trends in Vietnam
According to a survey on beer drinking conducted by the Ho Chi Minh City
University of Education, targeted at Vietnamese people, especially the young, most
of the respondents agreed that drinking alcoholic products is to well observe social
etiquette, exhibit a proper manner at work, and build and maintain social
networking and business relationships. This mindset has existed in Vietnamese
society for ages. In addition, Vietnamese people are able to consume alcoholic
products for any celebrations.
The drinking culture also reflects on consumer behavior and understanding it
is vital. A research conducted by Ipsos UU reveals crucial differences in alcoholic
consumption behaviors of people living in the three main regions of Vietnam.
Northern Vietnam based consumers tend to be trend followers, pay strong attention
to packaging, especially for products that are gifted and have considerable
knowledge of different brands. Central Vietnam based consumers tend to be
reserved, less willing to try new brands, and prefer local brands. The absence of a
variety of brands can be a key reason for this trend. By contrast, people living in
Southern Vietnam are classified as easy-going consumers who are willing to try
new brands and are knowledgeable about different brands.
In the past, wine was used mainly in hotels, restaurants, bars and a small
community of foreigners in Vietnam. In the past, the price for a bottle of wine was
very high compared to the general income of Vietnamese people, so beer was the
most widely used alcoholic beverage at that time. However, with the rising income
of the Vietnamese, along with the reduced cost of wine production, wine has moved

from parts of Europe through Free Trade Agreements to distributors and retailers in
Vietnam (according to Fitch Solutions).
Currently, with the increase in income, a growing middle class has been
created in Vietnam. Since 2010, the average disposable income of each household
in Vietnam has increased by about 9.9% per year, according to Fitch Solutions. In
2020, average disposable income is about 113.6 million VND.

14


Figure 1.3: Rising Income Levels Creating A large Middle Class
Source: National sources, Fitch Solutions

Although currently heavily affected by the Covid-19 epidemic, with
Vietnam's development momentum, this growth trend will continue until 2024,
(according to Fitch Solutions). From the increase in income, Vietnamese families
gradually tend to look for alcoholic beverages with more expensive prices, more
complex taste than using those with moderate prices before such as beer. Their
willingness to pay more to enjoy higher quality alcoholic beverages has created a
great opportunity for the import of foreign wine into Vietnam.
Nowadays, Vietnam is not a country with a large amount of wine
consumption, people here often choose beer because it is cheaper and more
affordable. Averagely, one person in Vietnam consumes only 0.2 liters of wine per
year. However, with a population of more than 97 million people, the total amount
of wine consumption is relatively large. Vietnam is a large wine consuming market
(15.3 million liters in 2020), ranking third only after Thailand (103.3 million liters)
and Malaysia (26.7 million liters) in the ASEAN.

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Figure 1.4: Estimate and forecast Vietnam's wine comsumption trend from
2018 to 2024
Source: National sources, Fitch Solutions

Currently, red wine is still the main consumption trend of Vietnamese people,
accounting for approximately 76% of wine consumption in 2020, which is followed
by white wine (18%), sparkling wine (2.3%), fortified wine (2.9%). Vietnamese
people prefer imported wine to domestic wine. It is easy to realize this, more and
more imported products are brought into Vietnam with different prices, along with
the people's economic life is increasing day by day, the preference for foreign goods
over domestically produced goods is an evident. Wine is no exception. People are
willing to spend a larger amount of money to be able to use wine products of brands
from other countries. People do not believe in domestic wine products, and the taste
of Vietnamese wine cannot be compared with wine empires in the world.
Wine is mainly consumed in big cities and provinces, for places where life is
still undeveloped, they tend to use homemade wine, medicinal wine, they have not
been exposed to the taste of wine.
1.1.2.2. Wine prices and competition in the Vietnamese wine market
The Vietnamese market has opened and witnessed a boom for a long time,
along with tastes and preferences of Vietnamese consumers increasingly accepting
food and beverages from remote regions such as Europe. From 2017 to 2020, total
food and beverages sales in Vietnam increase each year by an average of 11.3%.
From 2010 to now, imported wine has increased steadily each year by about 10%.
(source: Cekindo).
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Since joining WTO and ASEAN, Vietnam has slightly reduced tariff barriers
on wine imports. In order to further improve its long-term relationship with trading

partners, Vietnam is gradually reducing tariff barriers for wine exporters from
Australia (Australia) and other European countries. For example, The ASEANAustralia-New Zealand Free Trade Area (AANZFTA) is an Agreement that
promotes trade between wine partners from Australia and Vietnam. With the
reduction of tariff barriers, more and more potential opportunities are created for the
import of alcohol and alcohol products. From there, creating a new demand in line
with the current income and tastes of Vietnamese people. (source: Cekindo).
The wine industry in Vietnam is still underdeveloped and not as competitive
as in other major markets. The wines are only sold in luxury places mainly and the
suppliers are mainly imported from abroad. According to the Beer and Beverage
Association, Vietnam currently has 15 wine business enterprises in the form of
import - bottling and a few manufacturers and mainly companies that import whole
bottles. Given the huge potential of the market, the prosperity of the current sales
force, especially the demand for quality and public confidence, the imported wine
market will be very developed in the next few years.
While there have been recent positive developments related to regulatory
changes, such as the end of the airline import ban and the reduction of the import
tax on spirits, Vietnam still applies a series of policies to protect households
increase operating costs in the wine industry. Some of the main taxes that
businesses wishing to import alcohol will be subject to include:
- 50% customs duty on cost, insurance and freight (CIF)
- 35%-65% special consumption tax
- 10% value added tax (VAT)
Despite the difficulties, Vietnam offers exciting opportunities for those
involved in the wine industry. There is much room for growth and the growing
public interest in wine. Consumption of alcoholic beverages is a daily routine for
many Vietnamese and with the nation's growing consumer class, the number of
available consumers in the coming years will be substantial.
1.1.2.3. Legal regulations in the import of wine:
Currently, the government has issued Decree No. 105/2017/ND-CP on
alcohol business, in which, some points wine businesses should note as follows:

Trading in alcohol is on the list of industries and trades with conditional business
investment. Organizations and individuals producing industrial alcohol, producing
alcohol manually for the purpose of trading, distributing alcohol, wholesale and
retail alcohol, and sell alcohol for on-site consumption must obtain a license as
prescribed in the Decree No. 105/2017/ND-CP. Organizations and individuals that
17


manually produce alcohol for sale to enterprises that have a license to produce
industrial alcohol for re-processing must register with the commune-level People's
Committees.
Wine produced for domestic consumption and imported wine must be
stamped and labeled according to regulations, except for cases where the wine is
produced manually for sale to an enterprise with an industrial alcohol production
license for reprocessing.
To be eligible to trade and distribute alcohol, businesses need to meet the
following conditions:
- Being an enterprise established in accordance with law.
- Having the lawful right to use a warehouse or a warehouse system with a
total usable floor area of 150 m2 or more.
- Wines expected to be traded must satisfy food safety conditions as
prescribed.
- Having an alcohol distribution system in the area of 02 or more provinces; in
each province, there must be at least 01 alcohol wholesaler.
- There is a written introduction or a contract in principle of the alcohol
producer, other alcohol distributor or overseas alcohol supplier.
- Ensure full compliance with requirements on fire prevention and fighting and
environmental protection as prescribed.
There are some general provisions for wine importers:
-

-

-

-

Enterprises with a liquor distribution license are allowed to import alcohol
and must take responsibility for the quality and food safety of imported
alcohol. In case of importing semi-finished alcohol, the enterprise may only
sell it to an enterprise with an industrial alcohol production license.
An enterprise with an industrial alcohol production license is allowed to
import or entrust the import of semi-finished alcohol for the production of
finished alcohol.
Except for the case specified in Article 31 of this Decree, imported alcohol
must satisfy the following regulations: Goods must be labeled with alcohol
stamps according to the provisions of Article 6 of this Decree; Must be
granted by a competent Vietnamese state agency the receipt of the
announcement of regulation conformity or the written certification of
publication of conformity with food safety regulations (for alcohol without
technical regulations) before imported and must meet state inspection
regulations on food safety for imported food.
Alcohol can only be imported into Vietnam through international border
gates.
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-

Enterprises, including those that have not yet been issued with an industrial

liquor production license or a liquor distribution license, may import alcohol
to carry out the procedures for the issuance of a Certificate of Receipt of
Announcement of Regulation Conformity or Certificate of Conformity. food
safety regulations with a total capacity of no more than 03 liters on a wine
label. Imported alcohol in this case is not marketed.
When importing foreign wine to Vietnam, it have to pay some kinds of taxes:

-

Special Consumption Tax
Special Consumption Tax is a tax levied on organizations and individuals
that produce and import goods and provide services, which are required by
the State to regulate consumption. Special consumption tax is an indirect tax
and the tax rate is usually very high, so it has the ability to affect the use of
income for consumption by the population.
Goods and services that need to be regulated for consumption are specified
by the State in the list of goods and services subject to excise tax and may
change from time to time. The basis for calculating excise tax is the taxable
price and tax rate. The State collects excise tax at a percentage (%)
calculated on the taxable exchange rate of taxable goods and services.
Table 1.2: Special consumption tax on imported wine
Tax
(%)

Kind of wine
a) Wine from 20 degrees or more
From January 1, 2016 to the end of December 31, 2016

55

From January 1, 2017 to the end of December 31, 2017

60

From January 1, 2018

65

b) Wine under 20
From January 1, 2016 to the end of December 31, 2017

30

From January 1, 2018

35
Source: Xuatnhapkhauthucte.com

-

Import Tax:
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-

Based on the 2019 Preferential Import-Export Tariff Schedule, imported
wine has a tax rate of 50%.
Value-added tax on imported goods
Like other imported goods, imported wine into Vietnam are subject to 10%

VAT.

1.2. OVERVIEW OF THANH DAT IMPORT-EXPORT CO., LTD
1.2.1. The foundation and development of Thanh Dat import-export Co.,
Ltd
Thanh Dat Import-Export Co., Ltd was established and operated under the
company law passed by the National Assembly of the Socialist Republic of Vietnam
on May 19, 2003. Thanh Dat Import-Export Co., Ltd. was granted the establishment
license by the People's Committee of Quang Ninh province, and was granted a
business registration certificate by the Quang Ninh Department of Planning and
Investment with the following characteristics:
Name of the company: Thanh Dat Export-Import Limited Liability Company
Abbreviations: Thanh Dat Co.,Ltd
Legal representative: Mr. Lưu Xuân Khôi
Location: Km 4, Hai Yen Ward, Mong Cai City, Quang Ninh Province
Phone: 0913266668
Fax: 0333882455
Authorized capital: 1,500,000,000 VND(One billion and five hundered
million vietnam dong)
Main field of business: The company specializes in trading imported alcohol
products
Thanh Dat Import-Export Co., Ltd. has been operating in the market for
more than 10 years. In the early days of establishment, the company encountered
many difficulties and was still surprised when it entered the market where there
were many businesses operating in the same field that was formed before. seasoned
experience. Moreover, in terms of scale, this is a small company, the amount of
capital mobilized is still limited, the experience is still young, there is no brand
name in the market, and it has just started participating in international economic
integration. There is very little information available on the markets of the trading
partners.

However, after 7 years of operation since its establishment in 2003, the
company has made remarkable progress. Business activities have gradually
stabilized, the company has a loyal customer base, reliable business partners, and
the company's reputation is increasingly enhanced. Currently, the company is on the

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way to development and growing stronger with a variety of wine products with rich
and diverse designs.
1.2.2. Function and mission of the company
Currently, the company's main function is to trade and distribute imported
alcohol products. The market that the company provides is mainly in Hanoi and
some neighboring provinces. Besides, the company is also constantly researching to
capture new needs in the market to find ways to satisfy those needs.
Along with the above function, Thanh Dat Import-export company liability limited
also has to perform the following tasks:
- Conduct business in accordance with the lines of business stated in the
business license.
- Develop, organize the implementation of business plans and other related
plans to meet the requirements and tasks of the company.
- Implement commitments in foreign trade and economic contracts.
- Implement staff policies, asset management regime, labor, and salary, use
reasonable division of labor, train and foster the company's employees to
constantly improve their professional skills. culture, professional skills.
- Comply with the State's regulations on company protection, environmental
protection, protection of historical and cultural relics, national scenic spots,
social order, and safety.
- Open accounting books and record books according to the provisions of the
Ordinance on Accounting Statistics and subject to inspection by tax and

financial authorities.
- Pay taxes and perform other obligations as prescribed by law.
1.2.3. The organisational structure of the company
Thanh Dat Import-Export Co., Ltd is a small-scale company, so the
organization of the company's operating apparatus is relatively simple.
After a period of participation in the market, the scale of the company has
been expanded more and more, the company has also created jobs for more than 20
employees, contributing to reducing the unemployment rate in our country and
contributing to the growth of the economy. In the future, the company will expand,
even more, making positive contributions to theoverall development of the country.
The organizational structure of the company is shown in the following
diagram:

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Director

Vice Director Of Business

Vice Director Of Finance

Accoutant Department
Import-Export Department
Business Department
Stores and Warehouses

Figure 1.5: Thanh Dat Import-Export Co., Ltd's structure
1.2.3.1. Director
The director is the head of the company and is responsible for all business

activities of the company before the current law:
-

Responsible for foreign affairs.
Being the person who decides the guidelines, policies, and strategic goals of
the company.
Directly sign import-export contracts.
Approve all decisions applied within the company.
Supervising and checking all production, business, and investment activities
of the company.
Be the proponent of business strategies, develop product consumption
markets
Decide on financial expenses.
Supervising the entire operating system of the company.
The director has the right to recruit or dismiss employees who do not meet
production and business needs and has the right to force the dismissal of
employees who violate the company's rules and regulations on the operation.
1.2.3.2. Vice director

Supporting the director are two deputy directors, the deputy director in
charge of business and the deputy director in charge of finance.
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- Vice director of business: Responsible to the director for all business
activities in the company; Receive the company's business plan target; Organize the
implementation and completion of the delivery company's plan and at the same time
ensure the plan of external sources to get the highest profit; Manage, operate, and
train staff; Building quarterly and annual production and business plans and
ensuring profits for the company; Reporting the company's business results to the

director.
- Vice Director of Finance: Research on corporate law, circular decrees
related to business lines; Develop and propose salary regulations to be applied
throughout the company; Mastering the corporate income tax, VAT, domestic
investment promotion law, and relevant documents on financial management issued
by the state to apply to the company; Advise the director on capital management in
the company; Evaluate quarterly and annual profit and loss statement; Check the
balance sheet prepared by the accounting department; Develop and implement the
main regimes such as salary, social policies, and other policies for employees.
1.2.3.3. Accountant Department
The chief accountant is the assistant to the director in performing the
financial and accounting work of the company and is responsible for the opening of
books in accordance with the Ordinance on Accounting Statistics. The chief
accountant is under the direct direction of the director and assists the director in
directing the implementation of all accounting work and reporting on the company's
performance in accordance with state regulations.
The chief accountant is responsible to the director, synthesizes production
and business data, reports on the analysis of economic activities in the company
monthly, quarterly, and prepares a statement of financial needs for the director to
handle. The chief accountant is entitled to check the prices of purchased goods. To
participate in meetings of leaders to discuss business, accounting, finance,
commendation, and bonus work. Under the chief accountant, there are also two
accountants in charge of recording and reflecting daily business operations,
responsible for the accuracy and truthfulness of daily data.

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1.2.3.4. Import-Export Department
Most of the company's business products are imported, so the import-export

department plays an important role in creating input sources for the company. The
Import-Export Department has the following main functions:
-

-

Searching for partners, researching domestic and foreign markets to develop
plans and organize the implementation of import-export business plans and
other related plans of the company.
Advise the director in foreign relations, import and export policies,
Vietnamese and international laws on this business.
Help the director prepare contract procedures, international payments, and
other foreign trade activities.
Perform import-export business contracts and when authorized to sign
contracts in this field.
Help the director to receive guests, negotiate, transact, sign contracts with
foreign customers.
1.2.3.5. Business Department

The company's sales department consists of 6 employees, who are assigned
to be in charge of each specific market segment. Sales staff are responsible for
selling goods and providing services through direct transactions with customers in
the market area they are in charge of. On the basis of the general business plans set
out by the Board of Directors every year (quarterly), the sales department will make
specific plans and methods of implementation, divide the sales volume and target
revenue that each employee must complete. Each employee of the sales department
must carry out all necessary market activities to be able to achieve the goal of
searching for sales leads (mainly distribution agents, stores). Negotiate and sign
contracts, perform customer care activities, organize goods distribution and other
related activities

Operational results of the sales department are reported to the board of
directors on a monthly and quarterly basis. The business report of this period will be
the basis for making business plans and import plans for the next period.

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1.2.3.6. Stores and warehouses
The product introduction store is located on the first floor of the company.
The store has the function of introducing, wholesaling, and retailing the company's
alcohol products, understanding market needs, consumer needs to advise business
as well as receive information. about the market to supply the company.
Warehouse is to ensure that sales can take place continuously without
interruption, to promptly respond to customer needs, and facilitate smooth
circulation of goods. The warehouse performs the receipt, delivery, inventory, and
preservation of the goods that the company does business with. This is where the
intermediary connects the company with its suppliers and customers. The
employees at the warehouse are responsible for regularly providing the status of
export, import, and inventory in different periods to the director, ensuring that the
documents and books are accurate, in the correct quantity and quality as required.
Report any deviations for handling to ensure good business performance.
The marketing staffs are responsible for researching, investigating, and
collecting daily information in the market, processing and organizing that
information to come up with effective measures to help the company and its
management make decisions suitable determination. These employees are also
responsible for saling to help the company expand the market, organizing the
implementation of programs to promote the brands and goods that the business does
business, implementing promotions, customer conferences... to create good
reciprocal relationships with customers and ensure accountability.
1.2.4. Overview of the company's business activities

1.2.4.1. Features of the company's products
According to the business registration license, Thanh Dat Import-Export Co.,
Ltd is allowed to trade in import and export of consumer goods, of which the
company's current main business is imported wine products. This is one of the items
that are classified as special consumption goods and this item is also mainly aimed
at mainly serving the needs of men.
In Vietnam today, if we compare the market share of foreign alcohol with
domestic wine, foreign wine has a higher market share of about 80% because
according to the general psychology, Vietnamese people prefer to use foreign wines,

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