Beer consumption down 6% in first half
September 26, 2016 Category Retail, Weekly
Beer consumption in China contracted in the first half by 6% from a year earlier as rainy weather dampened consumption. China’s biggest beer maker China Resources Beer (CRB) reported first half sales of CNY15.21 billion, compared to CNY15.50 billion last year. Industry wide beer sales declined 3% in the first quarter on year, and 10% in the second quarter on year. Anheuser-Busch InBev China saw sales decline in the second quarter compared with the first, but the pace of the decline was less than the industry average. China’s No 2 brewery Tsingtao saw its sales plummet further than the industry as a whole. Regional brewer Yanjing, which has operations in Beijing, Guangxi and Inner Mongolia, also underperformed. “We believe Yanjing, as a regional player, will feel more pressure amid continuing market consolidation as national market leaders are expanding their presence into Yanjing’s strong markets,” JP Morgan Analysts led by Ebru Sener Kurumlu said in a research report. “We believe Tsingtao continues to remain under pressure given that it is losing market share to international brands in the premium segment and domestic brands are giving it a hard time in the mid-market.” CRB’s efforts over the last 10 years to bolster its market share could lead to better bargaining power with distributors and retailers, and increased margins, Kurumlu said. China’s beer prices, along with the profit margins of brewers, are well below the global average, the South China Morning Post reports.
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