China: First-half beer production increase stirs hopes for full-year growth

The soccer World Cup and the Winter Olympics appear to have revived China's taste for beer, with a rise in domestic production for the January-June half stirring hopes for the first full-year increase since a 2013 peak, The Nikkei Asian Review reported on July 26.

Output totaled 20.64 million kilolitres, up 1.2% on the year. People drank more beer at home and at bars and restaurants while watching the two big sporting events. Companies also pushed hard to increase sales of mid-tier to top-shelf products.

Chinese beer producers are largely logging solid earnings. Second-ranked Tsingtao Brewery enjoyed a 1.3% rise in sales volume on the year for the January-March quarter. Chongqing Brewery, owned by Denmark-based Carlsberg, saw a 3.3% jump, while top player China Resources Beer (Holdings) likely logged an increase as well.

Though industry watchers are rooting for the first growth in five years, the ongoing trade war with the U.S. could hamper China's economy and dampen consumer sentiment. Flooding and other natural disasters during the summer could hurt sales as well.

China remains the world's largest market for beer, responsible for double the sales of the U.S. and eight times that of Japan. Production and sales here during the second half of 2018 will affect industry players domestically and abroad.