Chinese Beer Loses its Delight

Published Date : Sep 24, 2015

In China, 2015 has been a headline year for the country’s beer market – though for wrong reasons. In two decades, beer production in the country has dropped, mainly due to casualty in changing drinking habits.

Once again Chinese beer headlines, as Anheuser Busch InBev contemplates one of the largest brewery deals of all time. This is regarding takeover of SABMiller, that too, at a time when both the brewing companies are leading in the Chinese market.

The question in the minds of industry men is if China will stand as an obstacle for the potential deal, which could either be due to the slowing economy or due to objections from regulators.

Similar to many consumer market in the country, the sales of beer has been affected by the moderate economic growth, and also by the growing affluence and sophistication of consumers in China. 

The beer production in China, which was 49bn liters by volume last year, has dropped almost 3% , a drop which has happened first time in the last 24 years, as stated by the National Bureau of Statistics in China.

The beer consumption in China had reached 34.2 liters per capita, which was slightly more that the per capita beer consumption in the world of 33 liters. As stated by a recent report of the U.S... Department of Agriculture, the market for mass-production of domestic beer has reached saturation.

Moreover, being a cheap beverage, the mass-market beers do not have much growth. Also, with growing disposable incomes, people want to tray other options such as whisky, wine or craft beers, as stated by an analyst of a Shanghai-based firm, China Market Research.

In China, a few segments of the middle class population are using wine not only for social reasons, but also for health reasons. This has mainly been observed in women in the age group 30 -40 years.