China Report | China Beer Market Insights 2012

– In 2011, the China beer market saw a steady growth of over 7%, which is a further 1% higher than the growth rate seen in 2010. The total consumption reached almost 498 m hl and maintained its top position in the world. Although economic growth does not have a big impact on the beer market, the lower economic growth forecast for 2012 will influence the income and consumption of particularly those on lower incomes. This will impact the low end and mainstream beer consumption to some extent. Therefore the 2012 forecast for beer market growth is around 5%, whilst the next three-year forecast is 3-5%.

During 2011, China faced a high and rising CPI that forced many brewers to raise retail prices. In January

2011, China Resources Snow Brewery Co Ltd (CRSB) increased its product prices by more than 10% in several provinces. A few months later, Tsingtao Brewery Co Ltd followed suit, raising the prices of several of its products by an average of 10%.

Given the country’s preference for high strength baijiu, health and safety issues associated with alcohol are a concern. In the last ten years, China’s alcohol consumption patterns have changed dramatically, from strong demand for the highly potent baijiu to the increased popularity of low or no alcohol beer.

The large breweries performed well in 2011; China Resources Snow Brewery Co Ltd (CRSB), Tsingtao and Yanjing all grew above the industry growth of 7% with growths of 11%, 9% and 10% respectively. There has also been further industry consolidation, with the top five brewers increasing volume share by 3% in 2011.

More local brewers are entering the premium segment and the trend for major Chinese breweries is to push

into the premium beer market.This is a market dominated by western brands such as Carlsberg and Heineken, accounting for 70% of sales in this segment. Chinese brands like Tsingtao already have the infrastructure, capital, distribution networks and international reach to branch into the premium segment.

Developing a high quality, premium product is a challenge and to convince Chinese drinkers to pay a premium over the price of locally produced beer, is a greater challenge.

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Report Details:
Published: September 2012
No. of Pages: 188
Price:US$12896