Decree No. 40/2008/ND-CP on the production and business of alcohol

DECREE

On the production and business of alcohol

________________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Commercial Law dated June 14, 2005;

Considering the proposal of the Minister of Industry and Trade.

DECREE:

Chapter 1.

GENERAL PROVISIONS

Article 1. Scope of application

This Decree stipulates on the production, business of alcohol and alcohol spirits including: investment, production, export, import, purchase and sale, and other activities related to the production and business of alcohol and alcohol spirits.

Alcohol and alcohol spirits referred to in this Decree shall be collectively called alcohol.

Article 2. Applicability

This Decree applies to organizations and individuals participating in activities related to the production and business of alcohol, alcohol spirits, and other activities related to the production and business of alcohol and alcohol spirits within the territory of Vietnam.

Article 3. Explanation of Terms

In this Decree, the following terms are understood as follows:

1. "Alcohol" is a beverage containing alcohol spirits. Alcohol is produced through fermentation, distilled or undistilled from starch of various grains, sugar juice of plants and fruits.

2. "Alcohol spirits" are spirits used for producing and mixing alcohol, scientifically known as Ethanol, with chemical formula C₂H₅OH.

3. "Handicraft alcohol production" refers to the activity of producing alcohol using simple equipment on a small scale carried out by organizations, households, or individuals.

4. "Medicinal alcohol" is alcohol mixed with herbal medicines. Herbal medicines are drugs produced from natural materials of animal, plant, or mineral origin.

1. Alcohol belongs to the category of goods restricted by the state for trade. Organizations and individuals engaged in the production and business of alcohol products (distribution, wholesaling, retailing) must have a permit, except in cases where handmade alcohol is produced for sale to enterprises with a Production Permit for alcohol for further processing.

1. Alcohol belongs to the category of goods subject to state restrictions on business. Organizations and individuals engaged in the production and business of alcohol (wholesale and retail) must have a permit, except in cases of handicraft alcohol production for self-consumption. All activities related to the production and business of alcohol must comply with the provisions of the law.

2. The State exercises unified management over investment, production, import and export, distribution, labeling, advertising, quality, food safety, environment, fire prevention and control in the production and business of alcohol and other activities related to the production and business of alcohol.

3. The State restricts the production of handicraft alcohol for self-consumption.

4. Organizations and individuals engaged in the production and business of medicinal alcohol, in addition to complying with the provisions of this Decree, must also comply with other relevant regulations of the Ministry of Health.

Article 5. Planning for alcohol production

1. Planning for alcohol production is an industry plan included in the Comprehensive Plan for the Development of the Beer - Alcohol - Soft Drinks Industry, established for a ten-year period and reviewed for the next ten years.

2. The Ministry of Industry and Trade shall organize the establishment, review, and approval of the Comprehensive Plan for the Development of the Beer - Alcohol - Soft Drinks Industry, including the planning for alcohol production nationwide.

3. Based on the Comprehensive Plan for the Development of the Beer - Alcohol - Soft Drinks Industry approved by the Ministry of Industry and Trade, the People's Committee of the province shall organize the establishment, review, and approval of the Comprehensive Plan for the Development of the Beer - Alcohol - Soft Drinks Industry in their locality, including the planning for alcohol production and traditional craft villages producing alcohol.

Clause 4. The establishment, adjustment, amendment, and supplementation of the overall development plan for the Beer - Wine - Soft Drinks industry shall be carried out in accordance with current regulations on planning management.

Article 6. Recognition of traditional craft villages producing alcohol

The provincial People's Committee shall decide to recognize traditional craft villages producing wine within their jurisdiction according to current regulations on recognizing traditional craft villages, ensuring the following conditions:

1. Traditional craft villages producing alcohol are located within the Comprehensive Plan for the Development of the Beer - Alcohol - Soft Drinks Industry in their locality.

Point 2. The traditional craft village must establish and apply a common production process for wine bearing the brand name of the traditional craft village.

3. Products of alcohol must meet the conditions regarding quality standards, food safety, and product labels applicable to all members engaged in alcohol production within the traditional craft village.

4. They must meet environmental protection and fire prevention standards applicable to all members engaged in alcohol production within the traditional craft village.

5. Recognized traditional craft villages producing alcohol must comply with the provisions of Clause 2, 3, and 4 of this Article within twelve months from the date this Decree takes effect.

6. Recognized traditional craft villages producing alcohol have the responsibility to build, preserve, and develop the brand of the traditional craft village.

Chapter 2.

Article 5. Application Documents for Issuance of Industrial Alcohol Production License

Article 7. Investment in alcohol production

1. Investment in alcohol production must comply with the approved Master Plan. Projects not included in the Master Plan must obtain written approval from the competent authority that approved the Master Plan.

2. The investor of an alcohol production project shall be responsible for strictly complying with legal provisions on investment, construction, quality standards, food safety, environmental protection, fire prevention, and other relevant legal regulations.

Article 8. Conditions for issuing an alcohol production permit

Conditions for issuing an alcohol production permit include:

1. The enterprise must have registered business to produce alcohol.

2. Alcohol production must comply with the overall development plan for the Beer - Alcohol - Soft Drinks industry, which has been approved.

3. There must be a production line of machinery and equipment, and a production process that ensures product quality and food safety standards.

4. Ensure conditions stipulated by law regarding labor safety, fire prevention, and environmental protection.

5. Possess legal ownership or usage rights for the brand of alcohol products in Vietnam.

6. Having technical staff with appropriate qualifications and expertise in the alcohol production industry.

7. Individuals directly involved in alcohol production must ensure good health and not suffer from infectious diseases.

Article 9. Alcohol Production Permit

1. The Ministry of Industry and Trade shall provide specific guidance on the authority, procedures, and formalities for issuing an alcohol production permit.

2. An enterprise may only commence production and business activities from the date it receives the permit.

Article 10. Revocation of Alcohol Production Permit

1. The alcohol production permit will be revoked in the following cases:

a) At the request of the enterprise;

b) When the enterprise is dissolved or declared bankrupt under the Enterprise Law;

c) When the enterprise's business registration certificate is revoked;

d) When the enterprise fails to meet the conditions specified in Article 8 of this Decree;

đ) When the enterprise does not commence operations within six months from the date of receiving the production permit without a valid reason confirmed by the competent authority.

e) Upon discovery that the application documents contain intentional false information.

2. After a minimum period of three months from the date of revocation of the alcohol production permit, if the enterprise meets the conditions specified in Article 8 of this Decree, it may apply for reissuance of the permit, which shall follow the same procedures as for a new issuance.

Article 11. Quality Standards for Alcohol

1. Alcohol is a mandatory product subject to quality standard declaration.

2. Procedures and formalities for establishing and declaring basic quality standards shall be carried out according to the guidelines of the Ministry of Science and Technology.

3. It is encouraged to apply national and international standards for alcohol.

4. Organizations and individuals representing traditional craft villages producing alcohol must declare the basic quality standards for village-produced alcohol.

5. Exported alcohol quality standards shall comply with the importing country's regulations.

Article 12. Alcohol Product Labels

1. Alcohol products can only be sold in Vietnam if they bear a registered product label.

2. Alcohol products consumed in Vietnam must comply with labeling requirements under the law on food product labeling.

3. For alcohol produced for export, labeling shall be done according to the requirements of the importing country.

Article 13. Domestic Alcohol Product Stamps and Imported Alcohol Product Stamps

1. Imported alcohol products intended for sale in Vietnam must be affixed with import stamps on their packaging as prescribed by the Ministry of Finance.

2. The Ministry of Finance shall regulate the printing, issuance, and management of imported alcohol product stamps.

3. The Ministry of Finance shall lead and coordinate with the Ministry of Industry and Trade to study and develop a timeline for affixing domestic alcohol product stamps, to be submitted to the Prime Minister for consideration and decision.

4. Alcohol products produced for export, display, or exhibition abroad shall be affixed with stamps according to the regulations of the importing country.

Article 14. Obligation to provide information about alcohol products

1. Organizations and individuals producing and trading in alcohol have the obligation to provide information about their alcohol products upon request from competent authorities and through mass media. Information about alcohol products must clearly state the ingredients, alcohol content, and the harmful effects of excessive alcohol consumption.

2. The Ministry of Culture, Sports and Tourism shall take the lead and coordinate with the Ministry of Information and Communications to specify the obligations for providing information through mass media regarding alcohol products.

Article 15. Rights and duties of alcohol production enterprises

In addition to the rights and obligations stipulated by law, alcohol production enterprises also have the following rights and obligations:

1. To train employees on fire prevention and explosion protection safety, environmental protection, and food hygiene and safety according to regulations.

2. To strictly comply with regulations concerning quality standards, food hygiene and safety, and product trademarks.

3. To fulfill the obligation to provide information about alcohol products in accordance with the guidance of authorized state agencies.

4. To implement reporting requirements as prescribed by law.

5. To organize regular health checks for employees directly involved in alcohol production every twelve months to ensure they are not infected with communicable diseases.

6. To establish distribution systems in compliance with regulations without having to apply for Wholesale and Retail Trading Licenses.

Article 16. Production of Handmade Alcohol for Business Purposes

1. Encourage organizations and individuals producing handmade alcohol to participate in traditional craft villages specializing in alcohol production if located within such areas.

2. Organizations and individuals producing handmade alcohol for business purposes must register their business activities in alcohol production according to registration regulations.

3. Before January 1, 2010, organizations and individuals producing handmade alcohol for business purposes must apply for a Handmade Alcohol Production License.

4. Conditions for Issuing a Handmade Alcohol Production License:

a) Having registered business activities in the production of handicraft alcohol;

b) Ensuring conditions related to environmental protection, quality standards, food hygiene and safety, and product labeling as prescribed by this Decree.

5. The Ministry of Industry and Trade shall provide detailed guidelines on authority, procedures, formalities, and documentation for applying for and revoking Handmade Alcohol Production Licenses.

6. Rights and Obligations of Organizations and Individuals Producing Handicraft Alcohol for Business Purposes.

In addition to the rights and obligations stipulated by law, organizations and individuals producing handicraft alcohol have the following rights and obligations:

a) Being able to join village craft associations for alcohol production if located within a craft village;

b) Must register their business operations as stipulated in Clause 2 of this Article and apply for a Handmade Alcohol Production License as prescribed in Clause 3 of this Article;

c) Shall be responsible for implementing regulations on environmental protection, quality standards, food hygiene and safety, and product labeling for alcohol products as prescribed by this Decree.

Article 17. Production of Handmade Alcohol for Personal Consumption

1. Organizations and individuals producing handmade alcohol for personal consumption are not allowed to sell it on the market.

2. Organizations and individuals producing handmade alcohol for personal consumption shall be responsible for complying with regulations on environmental protection during alcohol production activities, and quality standards and food hygiene and safety for the alcohol products they produce.

Chapter 3.

ALCOHOLIC BEVERAGE BUSINESS

Article 18. Conditions for Issuing a Trading License for Alcohol

1. Conditions for issuing a Trading License for wholesale or agency wholesale of alcohol include:

a) The trader must be a company established in accordance with the law and registered to engage in alcohol buying and selling activities;

b) Must have a fixed place of business with a clear address that meets technical and equipment requirements specified by the Ministry of Industry and Trade;

c) Must have storage facilities that meet requirements for alcohol quality preservation, environmental protection, and fire and explosion prevention;

d) Must have a distribution system.

2. Conditions for issuing a Trading License for retail or agency retail of alcohol include:

a) The trader must be registered to engage in alcohol buying and selling activities;

b) The business premises must meet requirements for alcohol quality preservation and fire and explosion prevention.

Article 19. Business License for Alcohol

1. The Ministry of Industry and Trade shall provide detailed guidance on the procedures, formalities, and authority to issue Business Licenses for wholesale trade, wholesale agency, retail trade, and retail agency of alcohol.

2. A trader may only engage in alcohol business activities from the date they are granted a Business License for wholesale trade, wholesale agency, retail trade, or retail agency of alcohol.

3. A trader with a Production License for alcohol may organize their product distribution system without having to request a Business License for wholesale or retail trade of alcohol.

Article 20. Rights and Obligations of Traders Engaging in Alcohol Business

In addition to rights and obligations stipulated by law, traders engaging in alcohol business have the following rights and obligations:

1. To purchase alcohol with legitimate origins.

2. To organize the circulation and consumption of alcohol on the market according to the issued Business License for alcohol.

3. To sell alcohol wholesale only to traders holding a Business License for alcohol.

4. To organize retail stores for consumers. Not to sell alcohol to individuals under 18 years old.

5. To display a valid copy of the Business License for alcohol and the types and prices of all kinds of alcohol currently being sold at all trading locations of the trader.

6. To comply with invoice and bookkeeping regulations, accounting books, and periodic reports on business operations to the state management agency that has issued the Business License for alcohol to the trader in accordance with current laws.

Article 21. Importation of Alcohol

1. Imported alcohol includes bottled, boxed, casked finished products for immediate consumption and alcohol in concentrate form and raw materials used to produce finished alcohol products in Vietnam.

2. Imported alcohol must have legal import documentation as prescribed and be affixed with an imported alcohol label issued by the Ministry of Finance.

3. Imported alcohol must bear a goods label in accordance with the provisions of the law.

4. Enterprises with a Production License for alcohol or a Business License for wholesale trade of alcohol may directly import or entrust the importation of alcohol and must be responsible for the quality standards and food safety of the product.

5. For alcohol products being imported into Vietnam for the first time, before completing import procedures, the importer must have a certificate confirming that samples have been tested and meet food safety requirements by the competent state authority.

6. Traders importing alcohol in concentrate form and raw materials for producing finished alcohol products may only sell to enterprises with a Production License for alcohol.

7. Alcohol may only be imported into Vietnam through international border gates.

Article 22. Rights and Obligations of Traders Importing Alcohol

In addition to rights and obligations stipulated by law, traders importing alcohol have the following rights and obligations:

1. To organize a distribution system for alcohol they directly import or sell to traders holding a Business License for wholesale trade, wholesale agency of alcohol.

2. To report consolidated information on importation, distribution, and consumption of alcohol according to the guidelines of the Ministry of Industry and Trade.

Article 23. Prevention and Combating Smuggling and Commercial Fraud

1. Counterfeit alcohol, imitation alcohol, smuggled alcohol, and alcohol not meeting quality standards and food safety requirements as prescribed shall be confiscated for destruction.

2. Organizations and individuals engaged in alcohol business have the obligation to cooperate with competent state agencies in preventing and combating smuggling of alcohol and commercial fraud.

Chapter 4.

STATE MANAGEMENT RESPONSIBILITIES

Article 24. Responsibilities of the Ministry of Industry and Trade

1. Submitting to the Government and the Prime Minister for issuance or issuing within its authority normative legal documents on the production and trading of alcoholic products.

2. Coordinate with other ministries, sectors, and localities to control and manage the production and business of alcohol through the overall planning for the development of the Beer - Alcohol - Beverage industry.

3. Fulfilling state management responsibilities over the alcoholic product industry in investment construction in accordance with legal regulations and this Decree.

4. Guide the establishment and application of Vietnamese standards, apply basic standards, and define procedures for registering basic standards.

5. Organize specialized management of alcohol product quality and food safety, industrial safety.

6. Define authority, procedures, and processes for issuing, adjusting, and revoking licenses for alcohol production, traditional alcohol production, wholesale alcohol business, wholesale agency business, retail alcohol business, and retail agency business.

7. Inspect and check alcohol production facilities regarding compliance with alcohol production planning, product quality, food safety, and environment; resolve complaints and accusations and handle violations in alcohol production and business activities.

8. Lead and coordinate with relevant agencies to organize inspections, detect, and handle other violations related to alcohol business.

9. Coordinate with state agencies to organize the confiscation and destruction of imported counterfeit, fake, substandard, expired, or unregistered alcohol products without proper labeling or seals.

10. Coordinate in organizing the promotion and dissemination of the implementation of this Decree.

Article 25. Responsibilities of the Ministry of Finance

Lead and coordinate with relevant ministries and sectors to establish regulations on affixing labels, printing, issuing, and managing the use of labels for imported alcohol; study the phased implementation of labeling for domestically produced alcohol.

Article 26. Responsibilities of the Ministry of Health

1. Draft and submit to the Government and Prime Minister for issuance of legal documents on food safety and prevention of the harmful effects of excessive alcohol consumption.

2. Monitor and supervise the implementation of regulations on food safety and prevention of the harmful effects of excessive alcohol consumption.

3. Coordinate with relevant agencies in detecting, inspecting, and handling alcohol production facilities that produce counterfeit or illegal alcohol, failing to meet food safety standards.

4. Define authority, procedures, and processes for issuing, adjusting, and revoking certificates of compliance with food safety requirements for alcohol products for organizations and individuals.

5. Lead and coordinate with ministries and sectors to develop and issue regulations on the management of alcohol production and business.

Article 27. Responsibilities of Ministries, Agencies Equivalent to Ministries, and Government Agencies

Ministries, agencies equivalent to ministries, and government agencies within their jurisdiction and according to the division of labor by the Government shall be responsible for coordinating with the Ministry of Industry and Trade to implement state management over alcohol production and business activities, and promote and disseminate the implementation of the Decree on alcohol production and business.

Article 28. Responsibilities of People's Committees of Provinces and Central Cities

1. To perform state management functions over the alcohol industry within their local administrative areas. They are responsible for managing and resolving issues within the authority of the locality.

2. Direct local alcohol production facilities to comply with the Planning, ensuring the set goals and development directions.

3. Establish, review, and approve the overall planning for the development of the Beer - Alcohol - Beverage industry in their areas, including alcohol production planning and alcohol craft village planning; review and decide on recognizing alcohol craft villages.

4. Check alcohol production, circulation, and consumption in their areas.

5. Supervise and inspect the implementation of planning, product quality standards, food safety, tax obligations to the State, labor safety, and environmental protection in alcohol production enterprises and handle violations according to the law in their areas.

6. Implement and promote and educate the people in alcohol production through the overall planning for the development of the Beer - Alcohol - Beverage industry and the provisions of this Decree.

7. Promote and educate the people to raise awareness about the risks and harms of excessive alcohol consumption and high-toxicity alcohol, gradually replacing them with high-quality alcohol meeting food safety and quality standards.

8. Direct local authorities at all levels to clarify the causes when alcohol poisoning occurs in their areas and take measures to handle them within their authority.

Chapter 5.

VIOLATIONS AND PENALTIES FOR VIOLATIONS

Article 29. Acts violating the laws on the production and business of alcohol

1. Producing and trading alcoholic products without a Permit issued by a competent state agency.

2. Producing, buying, selling, and consuming counterfeit, fake, or imitation alcohol products that do not meet quality standards as prescribed by law.

3. Circulating and selling products without labels, failing to register product quality, or failing to affix stamps on imported alcohol as required by law.

4. Conducting alcohol business at locations or with contents different from those stated in the issued Business License for Alcohol.

5. Forgery, alteration, renting, lending, transferring, buying, or selling Production and Business Licenses for Alcohol.

6. Conducting alcohol business at prohibited locations as stipulated by law.

7. Selling alcohol through automatic vending machines.

8. Selling alcohol to individuals under 18 years old.

9. Advertising or promoting alcohol contrary to legal provisions.

10. Sponsoring cultural, artistic, sports, entertainment, health care, and other social activities tied to alcohol product advertisements.

11. Using alcohol as prizes in contests, except for contests related to alcohol.

12. Organizations and individuals engaged in alcohol production and business who fail to report or report inaccurately to competent state authorities as prescribed by law.

13. Other acts of violation as prescribed by law.

Article 30. Handling Violations

Organizations and individuals committing violations of the laws on alcohol production and business shall be subject to disciplinary action, administrative penalties, or criminal prosecution depending on the nature and severity of the violation; if damage is caused, compensation must be provided according to the law.

Chapter 6.

IMPLEMENTING PROVISIONS

Article 31. Transitional Provisions

1. Within six months from the date this Decree takes effect, organizations and individuals currently producing industrial alcohol must apply for an Alcohol Production License; organizations and individuals currently producing artisanal alcohol for business purposes must register their business activity of artisanal alcohol production as prescribed by this Decree.

2. Within six months from the date this Decree takes effect, organizations and individuals currently engaged in wholesale trade, wholesale agency, retail trade, or retail agency of alcohol must apply for a Wholesale Trade License, Wholesale Agency License, Retail Trade License, or Retail Agency License for alcohol as prescribed by this Decree.

Article 32. Effectiveness

This Decree shall take effect fifteen days after its publication in the Official Gazette; previous regulations inconsistent with this Decree are hereby abolished.

Article 33. Implementation and responsibility for enforcement

1. The Ministry of Industry and Trade shall coordinate with relevant ministries and sectors to guide the implementation of this Decree.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees directly under the central government shall be responsible for enforcing this Decree./.