China’s Beer Industry Experiences Lowest Drop in 5 Years

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In 2015, the brewery business in China experienced its lowest decline in five years despite the fact that local brands are still dominating in the market, industry experts have revealed.

Last year, beer sales volumes in China declined by five percent to nearly 48 million liters compared with a year earlier. Euromonitor International research manager Joy Huang said that in 2014, sales dropped by just one percent year-on-year.

Huang explained that the factors behind the decline includes the cool summer as well as the country’s economic slowdown and netizens growing consciousness over their health. She further added that it could also be a result of fewer people eating out and more stringent drunk driving rules.

According to Mintel Group Ltd., China’s beer market is maturing despite the fact that the total sales volume has declined over the past few years. It also claimed that the market is strengthening, noting that nearly three-fourths of the total volume are taken by the top five beer enterprises. Smaller establishments, on the other hand, comprise between 10 and 15 percent of the market share, while the rest goes to imported products.

Although the sales volume in China’s beer industry has declined, the total market value has increased, potentially due to the increased premium brands promotion. However, foreign brands are still dwarfed by local products in the market.

Of the respondents surveyed, only 1 percent claimed to solely drink imported beers. The report reveals that this can be accounted for by the fact that small cities unlike major ones are less exposed to foreign beers, implying international brands should boost their efforts to penetrate them.

Aside from that, imported beers are also more expensive, thus forcing low-wage drinkers to resort to local beers. Also, there is a lack of education about international beer brands, which most likely contributes to the discrepancy.

Given these factors, foreign brands should concentrate on increasing their visibility across China, even in small cities, the report said. It further suggested that brands should modify their products to suit the palates of the Chinese market.

Beside the fact that not all Chinese have the luxury to dispose money on premium and foreign beer brands, 29 percent of the individuals surveyed never thought international brands were up for sale in the country.

Tsingtao and Snow are currently the leading brands in China. The Western brand Budweiser, on the other hand, not only comes fourth in popularity, but also as the most well-established foreign beer brand in the country. Trailing behind is Carlsberg and Heineken.