For consumers in China, it’s a fact of life. Brew in China, the world’s biggest market, sells at one-third the price in the U.S. Now foreign brewers are wooing the Chinese to pay more for brands that are popular worldwide.
The idea is to get increasingly affluent Chinese (CHHH1) to switch from local beers that sell for as little as 1.87 yuan (30 cents) for a 330-milliliter bottle to foreign lagers such as Budweiser, which costs about 6.13 yuan. To achieve that, overseas companies are acquiring or setting up new breweries across the country to widen the reach for their premium brands.
The four biggest players -- China Resources Enterprise Ltd. (291), the partner of SABMiller Plc (SAB), Anheuser-Busch InBev NV (ABI), Tsingtao Brewery Co. (168), which partners Asahi Group Holdings Ltd. (2502); and Beijing Yanjing Brewery Co. (000729) -- already account for 59 percent of the beer sold, according to Euromonitor International. They have gained market share as they increased scale. Now they want to boost profitability in the 360 billion yuan market.