Domestic beers in China face headwinds while imported beers soar

Imported beers are expected to reap frothier profits in China in the coming years while domestic beers have suffered 25 straight months of decline since July 2014, writes Chinese trade publication China Alcohoplic Drinks Industry.

At a time when domestic beers’ sales are lagging, consumption of imported beers and premium beers in the country, now world’s biggest beer market, have been steadily on the rise.

In 2015, China imported beers worth about US$575 million, a 41.3% increase over the previous year, according to the report. Meanwhile domestic beers are suffering from a more than two-year long dipping streak that only ended this August.

Tsingtao beer, for example, one of the country’s biggest beer producers, reported a net profit drop of 13.9% for 2015 and a 4.9% fall in sales, according to its annual report.

Despite imported beers’ small market share – currently only at 1.1% in China, it is expected to rise to 5% within the next five years, says He Yong, vice secretary general of China’s Alcoholic Drinks Association.

China’s burgeoning middle class, estimated at 200 million, will opt more quality-driven, established foreign beer brands, according to the report. Domestic beers have to diversify their offers and seek different strategies in order to stimulate growths, it added.