China: CBR Brewing Company, the Asian brewer, has posted a net loss in the first half of the year of US$23.8m, compared to US$15.9m for the same period last year. Net sales in the period registered US$22.3m, versus net sales of $40.2m for the first half of 2002. The company attributed the decline in part due to the SARS outbreak.
“Included in net loss for the six months ended June 30, 2003 was a charge of US$7.8m for the impairment of property, plant and equipment, as compared to a charge of US$9.8m for the impairment of property, plant and equipment for the six months ended June 30, 2002,” said the company.
"The decrease in sales volume in both dollars and tonnage…was mainly attributable to the following factors: a decrease in the volume of beer sold, which the company attributes to the reorganization of the company's marketing teams and marketing strategies; the reduction in sales branch offices; the outbreak of severe acute respiratory syndrome ("SARS") in China; reduced demand for Pabst Blue Ribbon beer, as a result of increasing competition from local brand beers, which sell at lower price points; the lowering of the selling price for some of the company's Pabst Blue Ribbon beer products, in order to encourage distributors to enhance their respective promotional activities; and an increased proportion of local brand beers, which are sold at lower price points.," the company said in a statement.
It went on to say that the beer market in China had continued to experience a weakening in consumer demand for foreign branded premium beers in China and increasing competition from local and foreign premium brands of beer.
"In response, the company has overhauled its operations and marketing programs, reduced costs and introduced several new local brand beers," it said. CBR said it expected the adverse market conditions to continue in 2003, resulting in operating losses at least for the remainder of 2003.
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