China: China’s beer makers report slower revenue growth in Q2 this year

Beer makers in China reported slower revenue growth in the second quarter of the year, mainly because of the impact of persistent rain on mobility and consumption, Yicai Global reported on August 16.

Chongqing Brewery's net profit rose 4.2 percent to CNY900 million (USD125.4 million) in the three months ended June 30 from a year ago, while revenue rose 4.2 percent to CNY8.9 billion (USD1.2 billion), compared with a year on year growth of 7.2 percent in the first quarter, the Guangzhou-based said in an earnings report on Aug. 14.

Budweiser Brewing Company APAC, the biggest beer maker by sales in the Asia-Pacific, saw sales in China drop 10.3 percent last quarter, "impacted by a soft industry, which cycled channel reopenings a year ago, and adverse weather in key regions of our footprint," it noted in a financial report on Aug. 1.

Budweiser APAC's overall revenue in the market tumbled 15.2 percent and that per a hundred litters fell 5.4 percent due to heavy precipitation across its core regions of Guangdong and Fujian provinces, it pointed out.

High external environmental pressure and persistent rain in South and West China impacted beer sales in dine-in channels, Li Zhigang, president of Chongqing Brewery, told Yicai. However, sales increase in non-dine-in channels offset the adverse impacts to some extent, Li added.

Chinese beer makers above a designated size produced 19.1 million liters in the first six months of the year, up 0.1 percent from a year earlier, according to data from the National Bureau of Statistics. However, their beer output fell 4.5 percent in April from March and has continued falling since.

The trend for the beer sector in the second half of the year is unclear, with the whole industry facing challenges, Li pointed out. To deal with this, Chongqing Brewery will dig deeper into beer's social property and adjust its brand portfolio and structure to meet consumers' various needs, Li added.

Chongqing Brewery focused on building its brand over the first half and promoting its high-end development while relying on a 'local plus international brand' combination. It allied with Chow Tai Fook Jewellery, fast food chain Kentucky Fried Chicken, and Bernachon Coffee to introduce co-brand products and hold promotional events.

The process of advancing high-end brands and products is ongoing in the beer industry, Li noted, adding consumer pursuit of high-quality products is also driving the industry's continuous upgrading.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .