China Beer Industry Report, 2010-2012 Nov. 2011 Abstract The beer output and sales volume of China have both seen stable growth in recent years, with the CAGR in 2007-2010 reaching 4.5%. In 2010, the beer sales volume of China reached 44.479 million kl, realizing the sales-output ratio of 99.3%. Considering the increasingly growing target consumer group as well as people’s enhanced consumption capability, the beer demand in Chinese market is expected to see moderate growth, with the targeted beer sales volume in 2012 hitting 51.48 million kl. Beer Sales Volume and Sales-Output Ratio in China, 2007-2012 (10,000 kl, %) In terms of regional development, beer enterprises have made increased effort to develop markets in West China. For example, Yanjing built 200,000 tons of capacity in Nanchong, Sichuan Province in 2010, expanding the total capacity in the region to 300,000 tons; in August 2011, China Resources Snow lavished RMB300 million to build a plant with the capacity of 200,000 kl in Yinchuan; in August 2011, Carlsberg became the controlling shareholder of 7 beer companies under Chongqing Beer after it became the second largest shareholder of Chongqing Beer in April 2010. In terms of competition pattern, beer enterprises are expanding their respective market share by means of acquisition and expansion in recent years. A case in point is Tsingtao, which took over Hangzhou Zijintan Brewery Company in 2011, a move to consolidate its business in Zhejiang market. In addition, the 11 expansion projects including the expansion of its No.2 plant and Shanghai plant as well as the new Shijiazhuang plant construction project will all be completed. In 2010, the sales volume of Tsingtao attained 6.35 million kl, with the market share of 14.3% (by sales volume), second only to China Resources Snow (20.9%). And the market share of Tsingtao is expected to increase to 16.8% in 2012. Source: Wind; ResearchInChina In 2011-2015, beer titans will develop in different directions. Tsingtao focuses on quality and profit, while China Resources Snow is eager to change the low-end image; Anheuser-Busch InBev is bent on the brand integration, while Yanjing and Carlsberg seek to establish footholds in South and West China. The report underscores China’s beer industry in the following aspects: Market scale and prospect, including output and sales volume, overall revenue and profit; Market features by region, including output by region these years and regional beer enterprises; Competition pattern and development tendency; Development of nine key homegrown enterprises, including overall operation, capacity, output and development strategy; Related Products China Sugar Manufacturing Industry Report, 2010 China Yeast Industry Report, 2010 China Beer Industry Report, 2009-2010 China Drinking Water Industry Survey Report, 2010 China Health Food Industry Report, 2010 Development of six foreign beer enterprises in China, including M&A and development strategy. China Edible Vegetable Oil Industry Report, 20102011 Table of contents 1. Overview of China Beer Industry, 2010-2012 1.1 Definition & Classification 1.2 Rising Sales/Output Ratio 1.3 Rising Revenue 4.1.4 M&A 4.2 Yanjing 4.2.1 Profile 4.2.2 Operation 4.2.3 Operation of Subsidiaries in Other Cities 2. Regional Beer Markets in China, 2010-2011 4.2.4 Strategy 2.1 Western Region 4.2.5 M&A 2.1.1 Southwest China 4.3 China Resources Snow 2.1.2 Northwest China 4.3.1 Profile & Operation 2.2 Central Region 4.3.2 M&A 2.2.1 Central China 4.4 Zhujiang (Pearl River) 2.2.2 North China 4.4.1 Profile 2.3 Northeast China 4.4.2 Operation 2.4 East China 4.4.3 Fund-raising Projects 2.5 South China 4.5 Chongqing Beer 4.5.1 Profile 3. Development of China Beer Industry, 20104.5.2 Operation 2012 4.5.3 M&A 3.1 Corporate Competition 4.5.4 Strategy 3.2 Industrial Competition 4.6 Jinxing Beer (Kingstar) 3.3 Reorganization, M&A and Capacity Expansion 4.6.1 Profile 4.6.2 Strategy 4. Key Beer Breweries in China 4.7 Huiquan Beer 4.1 Tsingtao 4.7.1 Profile 4.1.1 Profile 4.7.2 Operation 4.1.2 Operation 4.7.3 Strategy 4.1.3 Strategy 4.8 Lanzhou Huanghe 4.8.1 Profile 4.8.2 Operation 4.8.3 Strategy 4.9 Tibet Galaxy Science & Technology Development 4.9.1 Profile 4.9.2 Operation 5. Foreign Beer Breweries in China 5.1 Anheuser-Busch InBev 5.1.1 Profile 5.1.2 Operation 5.1.3 Strategy in China 5.2 Carlsberg 5.2.1 Profile 5.2.2 Operation 5.2.3 Western Development Strategy of Carlsberg 5.3 Asahi 5.3.1 Profile 5.3.2 Operation 5.3.3 Strategy in China 5.4 Suntory 5.4.1 Profile 5.4.2 Strategy in China 5.5 Heineken 5.5.1 Profile 5.5.2 Strategy in China 5.6 SAB Miller 5.6.1 Profile 5.6.2 Strategy in China Selected Charts • • • • • • • • • • • • • • • • • • • • • • • • • China’s Beer Output & Y-o-Y Growth, 2007-2012 China’s Beer Sales Volume and Sales/Output Ratio, 2007-2012 Operating Revenue and Total Profit of China Beer Industry, 2008-2012 China’s Beer Output by Province, 2009- 2011 Beer Output and Growth Rate in China by Region, 2010 Main Brands in Top Ten Provinces & Municipalities in China by Beer Output, 2010 Brand Influential Region of Listed Beer Breweries in China, 2010 Beer Output Trend in Yunnan, Guizhou and Sichuan, 2007-2012 Yunnan Beer Output & Y-o-Y Growth, Jan-Aug 2011 Sichuan Beer Output & Y-o-Y Growth, Jan-Aug 2011 Guizhou Beer Output & Y-o-Y Growth, Jan-Aug 2011 Beer Output Trend in Gansu, Shaanxi and Xinjiang, 2007-2012 Xinjiang Beer Output & Y-o-Y Growth, Jan-Aug 2011 Gansu Beer Output & Y-o-Y Growth, Jan-Aug 2011 Shaanxi Beer Output & Y-o-Y Growth, Jan-Aug 2011 Beer Output Trend in Hubei, Hunan and Henan, 2007-2012 Hubei Beer Output & Y-o-Y Growth, Jan-Aug 2011 Hunan Beer Output & Y-o-Y Growth, Jan-Aug 2011 Henan Beer Output & Y-o-Y Growth, Jan-Aug 2011 Beer Output Trend in Shanxi, Hebei, Tianjin and Beijing, 2007-2011 Shanxi Beer Output & Y-o-Y Growth, Jan-Aug 2011 Hebei Beer Output & Y-o-Y Growth, Jan-Aug 2011 Tianjin Beer Output & Y-o-Y Growth, Jan-Aug 2011 Beijing Beer Output & Y-o-Y Growth, Jan-Aug 2011 Beer Output Trend in Heilongjiang, Jilin, Liaoning and Inner Mongolia, 2007-2012 Selected Charts • • • • • • • • • • • • • • • • • • • • • • • • • • Heilongjiang Beer Output & Y-o-Y Growth, Jan-Aug 2011 Jilin Beer Output & Y-o-Y Growth, Jan-Aug 2011 Liaoning Beer Output & Y-o-Y Growth, Jan-Aug 2011 Inner Mongolia Beer Output & Y-o-Y Growth, Jan-Aug 2011 Beer Output Trend in Anhui, Zhejiang, Jiangsu, Shanghai and Shandong, 2007-2011 Anhui Beer Output & Y-o-Y Growth, Jan-Aug 2011 Zhejiang Beer Output & Y-o-Y Growth, Jan-Aug 2011 Jiangsu Beer Output & Y-o-Y Growth, Jan-Aug 2011 Shanghai Beer Output & Y-o-Y Growth, Jan-Aug 2011 Shandong Beer Output & Y-o-Y Growth, Jan-Aug 2011 Beer Output Trend in Fujian and Guangdong, 2007-2012 Fujian Beer Output & Y-o-Y Growth, Jan-Aug 2011 Guangdong Beer Output & Y-o-Y Growth, Jan-Aug 2011 Sales Volume & Market Share of China’s Major Beer Brands, 2005-2012 Market Shares of Snow, Tsingtao and Yanjing, 2005-2012 Ranking of Key Beer Breweries in China by Total Profit, 2010 Ranking of Key Beer Breweries in China by Net Income, 2010 Ranking of Key Beer Breweries in China by Net Income, 2011H1 Foreign Capital Participation in China’s Top ten Beer Breweries Price, Time to Market and Rival Product of Medium and High-end Beer Launched by China’s Beer Brands Market Range and Capacity of Brands of Seven Beer Breweries like China Resources and Tsingtao, 2011 Shareholder Structure of Tsingtao Beer, 2011 Operating Revenue & Net Income of Tsingtao Beer, 2007-2011H1 Gross Margin and Net Profit Margin of Tsingtao Beer, 2006-2011H1 Proportion of Operating Revenue and Gross Margin of Tsingtao Beer by Region, 2010-2011H1 Development of Tsingtao Beer Brand Structure Selected Charts • • • • • • • • • • • • • • • • • • • • • • • Acquisition and New Projects of Tsingtao Beer, 2011 Operating Revenue and Net Income of Yanjing Beer, 2007-2011H1 Revenue of Beer per Ton and Growth Rate of Yanjing Beer, 2007-2011H1 Growth Rate of Sales Volume in Beijing, Guangdong and Sichuan of Yanjing Beer, 2011H1 Acquisition Project of Yanjing Beer, 2011 New and Completed Projects of Yanjing Beer, 2011-2012 Turnover of China Resources Enterprise by Business, 2011H1 Acquisition Project of Snow Resources, 2011 New and Completed Projects of Snow Resources, 2011-2012 Equity Structure of Pearl River Beer Operating Revenue and Net Income of Pearl River Beer, 2007-2011H1 Operating Revenue of Pearl River Beer by Region, 2010 Operating Revenue, Cost and Gross Margin of Pearl River Beer by Product, 2010 Operating Revenue and Net Income of Chongqing Beer, 2008-2011H1 Operating Revenue, Cost and Gross Margin of Chongqing Beer by Sector, 2010 Operating Revenue and Growth Rate of Chongqing Beer by Region, 2010 Operating Revenue and Net Income of Huiquan Beer, 2007-2011H1 Operating Revenue and Net Income of Lanzhou Huanghe, 2007-Jan.-Sep.2011 Operating Revenue of Lanzhou Huanghe by Product, 2008-2010 Operating Revenue and Net Income of Tibet Galaxy Science & Technology Development, 2008-2011H1 Acquisition Project of Anheuser-Busch InBev, 2011 New and Completed Projects of Anheuser-Busch InBev, 2011-2012 Investment Relationship between Carlsberg and Chinese Beer Breweries How to Buy You 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