This news was cut from South China Morning Post on the 16 of November. This news
reported the large volume of beer sales in the Mainland, as the world’s second-largest beer market
by volume of sale. Also the volume is still increasing.
On the other hand, Hong Kong people are drinking less on beer per head than before the
handover.
First, talk about the increasing demand on beer in China. Chinese traditional wine like Mao
Tai Jiu was in great demand previously but since people found that traditional wine content
contains a high percentage of alcohol, that not healthy to human’s body, hence people buy less
traditional wine and the price of Mao Tai Jiu falls, (diagram 2). Beer and traditional wine are
substitutes. People replace the traditional wire with beer that causes an increase in demand for beer.
(diagram 1). This will cause a decrease in price and quantity transacted of Mao Tai jui. But there
will be an increase in price and quantity transacted of beer.
(diagram 1)
(diagram 2)
Second, the beer drinkers have the habit of eating snacks and fried food with beer.
Because beer and the snacks, fried food are complements. These goods are in joint demand. The
increasing demand of beer in China will cause increase in demand for snacks and fried food.
( diagram 3)Also the market price and the quantity demand of snacks and fried will increase.
(diagram3)
(diagram 4)
Last, talk about the decrease in demand for beer in Hong Kong . After the handover, the
economic turn bad so Hong Kong people’s income decreases. Beer is a normal good. The decrease
on Hong Kong people’s income leads to a decrease in demand for beer. Then the market price and
quantity transacted of beer will decrease. ( diagram 4 )