French firm taps Vietnam water riches
HO CHI MINH CITY - For Christiane Kuehne, making mineral water in Vietnam has proved a profitable business. Kuehne runs a joint venture between Perrier Vittel SA of
France and a Vietnamese firm that started producing and
selling mineral water called La Vie in 1994.
Sales soared and La Vie quickly became the market
leader.
But that success caught the eye of many would-be
mineral water makers in Vietnam.
Kuehne says a number of local firms and even
individuals began to copy the name, the style of the La
Vie logo and the colour of the bottle labels. In all, 26
imitations had popped up the last two years, a record for
trademark violations in the consumer products industry
in Vietnam, she said.
``Head office is very pleased with our business. Clearly
we are the market leader and we have a very good local
partner,'' Kuehne said in an interview in Vietnam's
bustling commercial capital.
``As for the imitations, they come and go but we fight
them. I believe the situation will improve because the
government is aware of it and knows it must do
something because it's the kind of thing that makes
Vietnam unpopular with foreign investors.''
Vietnam has been roundly criticised for not enforcing
trademark and copyright regulations, with foreign
computer sotfware makers especially vocal.
Perrier Vittel holds 65 percent of the joint venture, called
the Long An Mineral Water Joint Venture Company.
Perrier Vittel is wholly owned by Nestle SA of
Switzerland.
Kuehne said annual sales growth for the mineral water
industry was 20 percent. She added that she expected
La Vie to retain its estimated majority share of the
national market.
While purchasing power was concentrated in the capital
Hanoi, Ho Chi Minh City and the southern Mekong
Delta, Kuehne said La Vie had managed to penetrate
most rural areas.
Kuehne said the venture was making a profit although
she declined to give details or expansion plans.
But she added the firm was committed to Vietnam,
which has seen its economic fortunes dip amid Asia's
financial crisis and growing perceptions the country is a
tough place to make money.
``We are here to stay,'' Kuehne said.
``There is no question the market is growing here. Every
day you open the paper and read about bad municipal
water.''
Kuehne said Vietnam had probably hundreds of mineral
water companies, although many only produced at the
provincial level.
Imitations of La Vie began appearing in 1996 when the
joint venture had trouble meeting demand for a short
time, she said.
Kuehne said the Ministry of Science, Technology and
Environment's Industrial Property Department (IPD) --
the trademarks authority -- was doing a commendable
job but had no power to execute decisions.
That responsibility rests with the market management
unit under the Trade Ministry.
``We have had our successes against the imitators, but
they keep appearing. Some have been shut down
although when they are small outfits they can easily start
up again,'' Kuehne said.
``The government genuinely wants to do something
about this but it is a daunting task. They need to have the
means to do it and the budget,'' she added.
Kuehne said a key reason for La Vie's success in
Vietnam was the relationship between the foreign and
local partner.
``It's been crucial. The procedures and hygiene at our
factory are very rigorous,'' she said.
La Vie sells for a higher price than other mineral waters
made in Vietnam partly because of strict quality controls.
Every month samples are sent to Paris for checks. A 1.5
litre bottle of La Vie retails for around 8,000 dong
($0.62).
By Dean Yates REUTERS - July 29, 1998.
|