China: Majors brewers increase beer price by about 5%

The two leading Chinese breweries, Tsingtao Brewery Company and China Resources Beer (Snow Beer), announced in a rare unanimous movement a beer price hike of some of their products of about 5% effective January 1st, 2018. The companies blame rising costs of materials, labor, packaging and transportation for the drastic step.

Tsingtao Brewery Company , the maker of China’s best known Tsingtao beer, released on Friday a statement saying that the increase was not across the board and only averages about 5 percent after local media reported before that the company had raised prices on some products by 10 to 20 per cent.

After the announcement shares of the two companies as well as those of other leading breweries including Beijing Yanjing Brewery and Chongqing Brewery jumped as much as 23 percent before paring their gains and ending with increases in the lower double-digit region and below.

According to analysts the Chinese beer market is maturing with increasingly affluent consumers willing to spend more money on prestigious or specialty beer brands. Last August it became known that China is already the largest market of stout beer in the world, even ahead of USA, UK and Ireland (inside.beer, 8.8.2017). On the other hand the majority of Chinese beer is sold in large volumes at cheap discount prices, a business model that has come under pressure in the last years and only recently has shown some signs of recovery. (inside.beer, 30.10.2017)

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