Cadbury Schweppes, the world's biggest confectionery maker, signed an agreement yesterday with Vietnam's leading food maker Kinh Do, giving it access to the company's extensive distribution network.
Vietnam's confectionery market is seeing double-digit growth but Cadbury has not yet had a share of the rising sales.
Kinh Do, which started life as a snacks producer and now offers a wide range of candies, cakes, baked goods, and even ice-cream, is the clear market leader however, and will give the multinational nationwide exposure.
In turn, Kinh Do says it is looking forward to learning from the multinational's marketing experience, and potentially gaining access to its international markets although Cadbury told AP-Foodtechnology.com that it has no plans to share its international sales network, despite suggestions made by the local media.
But Kinh Do has repeatedly stated its ambitions to expand overseas. It has previously joined up with PepsiCo to run joint promotional campaigns and mutual distribution of products and also owns the Walls ice-cream brand since 2003.
Tran Kim Thanh, chairman of Kinh Do, said that the cooperation with Cadbury was an opportunity to "create new products for our customers…and may give future access to foreign markets".
Thanh added that the Vietnamese firm needed to prepare for greater competition ahead of Vietnam's access to the World Trade Organisation.
For Cadbury, distribution of its confectionery products will start immediately, although it did not reveal which of its brands will be launched in Vietnam. The firm already claims a world share of around 10 per cent of the global confectionery market with brands like Dairy Milk, Halls, Trident, Clorets, Bassetts and Trebor.
"Any Cadbury products would instantly be attainable nationwide once they get access to Kinh Do's comprehensive network," said Denise Mullett from market research firm Customer Insights.
She added however that there is very low chocolate consumption in Vietnam and hard candies are more popular.
Kinh Do is one of few successful local food brands. The company reported a 22 per cent rise in net profit in 2005 to VND91.1 billion (€4.5m).