Chinese Drinkers Opt for High-end Beers

While the citizens of the Czech Republic still dominate in terms of consumption per capita, the increasing popularity of beer among Chinese drinkers has seen them emerge at the top of the pile when it comes to total volume downed.

With closest rivals the USA staggering well behind with an annual consumption of 24 billion litres, the Chinese crossed the 50 billion litre mark for the first time earlier this year. In 1961, the average Chinese adult drank approximately half a bottle of beer, by 2007, that figure had risen to almost 103. With this number continuing to increase on a year on year basis, the newfound popularity of the drink in the Chinese market is attracting increasing interest from the international brewing giants.

While established domestic brands, typically European style pale lagers exemplified by market leader Tsingtao, account for the majority of sales, international players have been successful in establishing an increasing presence in China, with branding for high profile products including Carlsberg and Budweiser an increasingly common site on the streets of major cities.

In a country where locally produced brews sell for as little as two Yuan (£0.20) in major urban areas, products imported by international brewing giants including Carlsberg, Anheuser–Busch and Asahi have enjoyed a year on year increase in market share, in spite of the fact that their products regularly sell for at a price point of up to six Yuan (£0.60). Primarily seeking to target a young, well educated, internationally minded corner of the market, comparatively high prices have been offset by presenting these foreign brands as luxury, high end items.

Given the Chinese middle classes’ seemingly insatiable appetite for overseas luxury brands, the use of advertising and elegant packaging in the elevation of the humble pint to status symbol is, perhaps, unsurprising. More interesting is the speculation surrounding the sustainability of the trend. Previous studies of emerging economies have shown that consumption of beer continues to grow until people earn $22,000 a year, at which point figures begin to fall, replaced by other drinks traditionally seen as more upmarket.

For the moment, however, trends do not appear to be playing out as expected. The well documented fashion among China’s emerging elites for expensive wines and high end spirits continues, but sales have slowed noticeably in the past three years, while the market for beer increases annually. Ultimately, beer is a more familiar product to the average Chinese consumer – while wine, for example, is a relatively recent introduction to China, brewing has a heritage stretching back generations. By marrying this familiarity with the current trend for all things high-end, international brewing firms may well have struck gold in opening an enduring new market thirsty for their products.

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