Monday, 8 September 2008

World's Largest Beer Brand Now Chinese

The Chinese beer market has long been extremely regional, with only Tsingtao cutting across provincial barriers to become a true national brand. Now it has competition:
SABMiller's Chinese beer brand, Snow, is set to sell 10bn pints this year - overtaking Anheuser Busch's Bud Light to become the world's largest beer brand.

The company entered the market in 2002 with a Chinese joint venture partner and invested heavily in the country's only mainstream national beer brand sold across all the provinces - overtaking Tsingtao Breweries in 2006.
I'm actually quite surprised to hear this, as Tsingtao has a respected tradition, and long-standing distribution networks (alcoholic beverage distribution in China is notoriously corrupt and fragmented). Economies of scale backed by foreign capital, coupled with aggressive distribution, may explain part of Snow's success:
But despite Snow's growth, profitability for SABMiller is low. Snow accounts for 18% of its global beer volumes, but less than five per cent of profits.

Though prices rose in the past year, the average price for half a litre of Snow is still only two Chinese yuan - 16p.
For what it's worth, I found Snow undrinkable when I sampled it in Beijing last year. Stories like this make me question why I will be moving to the beer wasteland that is China this December.

1 comment:

Maureen Ogle said...

I've been to China twice, first in 1987 and then in 1999.

The first time there was GREAT beer all over. Local brands, all of it unpasteurized (so, yes, we needed common sense and a good nose). But very good beer.

We also found local soft drinks everywhere we went. I didn't like them (too sugary) but my husband did.

The trip in 1999? All that local beer was gone, replaced by Heineken and Bud. Other things were gone, too: No more local soft drinks (it was Coca-Cola or nothing). The custom of wrapping packages in elaborate paper bundles (replaced by dumping stuff into plastic bags).

All the stall foods at the Forbidden City were gone, replaced by vendors selling pre-made unidentifiable stuff pre-wrapped in plastic.

You get the drift.