Chongqing Brewery announced the closure of the only brewery in Liupanshui city. The reason of production suspension is the decrease of the brewery’s profitability and policy of reducing the number of redundant businesses.
The capacity of Liupanshui brewery is 60000 tons. The sales were at the level of 50000 tons. As at 31 December 2015, the sales reached 86.2965 million yuan, i.e., 2.59% of the consolidated profit of Chongqing Brewery Group. 3.72 million litres of beer have been sold, representing 3.76% of the total sales of the company.
According to the company’s management, the purchasing power of the population in the region and the volume of beer consumption began to fall. Beer prices here are much lower than in other provinces and the competition is very high. The maintenance costs of obsolete equipment of the brewery are too large and have a negative impact not only on the work of the regional brewery, but also on the financial results of the company.
Last November, Chongqing Brewery decided to optimize production by closing the excessive amount of breweries and the modernization of production.