---
title: "Analysis of the Development Status of China's Beer Industry in 2015"
description: "Amid significant changes in the market environment and consumer mindsets, the beer industry has entered a new phase focused on competing for high-end products, strengthening internal capabilities, and building brands. Although China is already a major beer producer, it has not yet reached the level of a beer powerhouse. To achieve the qualitative transformation from a major producer to a strong player, it is necessary to seriously address a series of unreasonable phenomena and problems in the current beer industry. Furthermore, due to long-term aggressive mergers and acquisitions, large-scale redundant construction, and capacity expansion, the industry has intensified disorderly market competition, with monopolistic behaviors such as market domination becoming increasingly prevalent."
author: "New Distribution"
publisher: "New Distribution"
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published: "2015-07-27"
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# Analysis of the Development Status of China's Beer Industry in 2015

> Amid significant changes in the market environment and consumer mindsets, the beer industry has entered a new phase focused on competing for high-end products, strengthening internal capabilities, and building brands. Although China is already a major beer producer, it has not yet reached the level of a beer powerhouse. To achieve the qualitative transformation from a major producer to a strong player, it is necessary to seriously address a series of unreasonable phenomena and problems in the current beer industry. Furthermore, due to long-term aggressive mergers and acquisitions, large-scale redundant construction, and capacity expansion, the industry has intensified disorderly market competition, with monopolistic behaviors such as market domination becoming increasingly prevalent.

Amid significant changes in the market environment and consumer mindsets, the beer industry has entered a new phase focused on competing for high-end products, strengthening internal capabilities, and building brands.
Although China is already a major beer producer, it has not yet reached the level of a beer powerhouse. To achieve the qualitative transformation from a major producer to a strong player, it is necessary to seriously address a series of unreasonable phenomena and problems in the current beer industry. Furthermore, due to long-term aggressive mergers and acquisitions, large-scale redundant construction, and capacity expansion, the industry has intensified disorderly market competition, with monopolistic behaviors such as market domination becoming increasingly prevalent. Coupled with the involvement of foreign capital, the entire industry has fallen into a monopoly quagmire. The following is an analysis of the development status of China's beer industry in 2015:
**Beer Industry Enters the 'New Normal'**
Currently, it is midsummer, the peak season for beer consumption. This year's beer market has seen many 'tall, rich, and handsome' products, with white beer being a representative example.
In fact, as early as 2013, Yanjing Beer had already launched original pulp white beer. This name, still relatively unfamiliar in the Chinese market, seems to have become the industry focus this summer.
In June this year, Tsingtao Beer launched whole wheat white beer. There are also reports that China Resources Snow will soon launch white beer, which is currently in internal testing.
Calling white beer the 'tall, rich, and handsome' of beers is not an exaggeration, simply because it is expensive. On Yanjing Beer's official Tmall flagship store, a 12-degree 500ml canned original pulp white beer costs 307 yuan per case (12 cans), and even at promotional prices, it reaches 199 yuan, equivalent to over 16 yuan per can.
In addition to these national industry giants, some local players are also actively expanding into the high-end market. Take金星啤酒 (Golden Star Beer) as an example; it launched its original pulp series in February this year. According to a relevant person in charge, a 750ml bottled product in this series has a market price of up to 20 yuan, and even the relatively cheaper canned version sells for around 5 yuan per can.
'Now this series has passed the introduction period. Despite the high price, according to market feedback, it is very popular among consumers,' the person told reporters.
However, industry insiders believe that focusing on the high-end market has become an industry trend, and upgrading product structures is a common practice among beer producers. 'This is closely related to changes in the industry environment and consumer mindsets,' the person said.
Data shows that in 2014, China's beer production reached 49.219 million kiloliters, a year-on-year decrease of 0.96%, marking the first annual negative growth in 24 years.
Currently, whether by tonnage or sales, beer is the largest category in FMCG. Such a large production base makes it difficult to replicate the high growth of the past. Moreover, beer sales in many regions have been 'prosperous season but not prosperous' for two consecutive years. Due to the impact of temperature and the lag in the transmission of policies restricting 'three public consumptions', experts predict that the Chinese beer market will undergo major changes in 2015.
**Low-End Products Maintain Market, High-End Products Generate Profits**
In previous years, the Chinese beer industry continuously played the game of 'big fish eating small fish'. With the expansion of domestic and foreign giants such as China Resources Snow, Tsingtao Beer, and AB InBev, a large number of small and medium-sized beer producers gradually disappeared.
With a series of mergers, acquisitions, and capacity expansion, the Chinese beer industry has entered an era of oligopoly. It is understood that the market concentration of the top five domestic beer groups (China Resources Snow, Tsingtao Beer, AB InBev, Yanjing Beer, and Carlsberg) has approached 80%.
However, with changes in the industry environment and per capita consumption gradually approaching its limit, land grabbing is clearly a thing of the past, and the industry is in an era of structural adjustment.
'According to changes in consumer mindsets, beer consumption has begun a transformation from quality to branding. Intense market competition has led beer companies to continuously adjust their product structures and upgrade products and brands,' said the relevant person in charge of Golden Star Beer.
Along with the overall industrial restructuring, a large number of low-end beers are gradually fading out of the market. According to reporters, with rising costs of raw materials and sales expenses, beers priced below 3 yuan basically have no profit margin.
'A bottle of beer priced at 3 yuan yields a profit of at most 0.1 yuan. A bottle priced at 10 yuan yields a profit of several yuan, and consumers are willing to accept high-quality products, so this is the fundamental reason why beer companies are competing for the high-end market,' an industry insider told reporters.
Taking Golden Star Beer as an example, it launched multiple products this year. Among them, the original pulp series is positioned in the high-end market, and the replacement products of the pure draft series are positioned in the mid-to-high-end market. 'Currently, in the entire group's product structure, the proportion of mid-to-high-end products has exceeded 70%. Some companies have even higher proportions,' said a relevant person from Golden Star Beer.
Although low-end products are not profitable, they cannot be completely abandoned. Maintaining a healthy product structure is particularly important for beer companies. 'In urban and rural markets, low-end beer is still well recognized. If you stop producing it, this market will immediately be occupied by other brands. Mid-to-high-end beer, besides enhancing the brand, contributes profits to the enterprise in the most practical way,' an industry insider told reporters.
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