BEER IN ASIA-PACIFIC: Beer Asia-Pacific:
Market Overview – Introduction
This report analyses the market for beer in Asia-Pacific. For the purposes of the study,
the market has been divided into four sectors:
* Lager
* Dark beer
* Stout
* Non-/low-alcohol beer
Much of the information in this report is of a statistical nature and, whilst every
attempt has been made to ensure accuracy and reliability, Euromonitor cannot be held
responsible for omissions or errors. The forecasts given are estimates based on the state
of the market at the time of writing and the most reliable sources of information
available.
Hong Kong has been treated as a separate entity alongside the People's Republic of
China, of which it is a Special Administrative Region (SAR). This is because, at the time
of writing, market conditions in the former colony were substantially different - in
terms of currency, taxation and legislation - from those prevalent in mainland China.
Figures in tables are calculated from unrounded data and may not sum.
BEER IN ASIA-PACIFIC: Beer Asia-Pacific:
Market Overview - Main Findings
* The beer market in Asia-Pacific performed as well as could be expected during 2007,
given that many national markets were still recovering from the financial crisis which
affected the region towards the end of the review period. Rising demand in less
developed national markets such as China was offset by a poor performance from the
region's largest market, Japan.
* Total beer sales in Asia-Pacific amounted to over 31
billion litres in 2007, an
increase of around 4% over 2006.
In value terms, the regional beer market was worth
over
US$81 billion in the same year, up almost 9% on the
previous year.
Changing drinking habits coupled with an increase in the number of Western-style pubs
and bars were the main contributing factors to regional growth, aside from more general
macroeconomic factors. Most national markets saw a relaxation in legislation governing
the production of alcoholic drinks during the review period, which also aided growth.
China generated the greatest volume sales in the region throughout the review period,
underpinned by its large population. Trends favouring the consumption of drinks with a
lower alcohol content combined with the increased domestic production of beer stimulated
growth. The final year of the review period saw a number of mergers and acquisitions
between domestic players and international brewers in China.
Lager was the largest sector in the region in both volume and US$ terms, with sales
amounting to 30 billion litres and US$77 billion by 2007. Despite the wider availability
of more exotic beer types across the region during the review period, Asian consumers
have not yet developed any great interest in non-lager products. Lager was thus also the
fastest growing sector, with volume growth of over 4% in 2007, driven by a strong
performance from the economy lager subsector.
Glass was the most popular packaging format as it is the standard packaging format for
lager in most national markets. The tradition of using returnable glass bottles in a
number of key national markets helped sustain the popularity of the format throughout the
review period.
Kirin Brewery Co Ltd was the regional market leader in 2007, commanding a volume share
of 7.3%, slightly down over 2006. Kirin was closely followed by another Japanese brewer,
Asahi, which had a 6.2% share of the regional market in the same year. Asahi is Kirin's
main competitor, both at a regional level and in Japan itself. Outlets included in the
"other food stores" category continued to generate the greatest volume sales in the
retail beer market in 2007, underpinned by the large numbers of such outlets in markets
such as China and Indonesia. Supermarket/hypermarkets are however gaining share across
the region, and were the most dynamic format between 2003 and 2007, accounting for 27.6%
of total sales by the latter year.
Euromonitor forecasts that the Asia-Pacific beer market will grow at a rate of nearly 7%
in volume CAGR terms between 2007 and 2012, with strong performances from the most
1
important sector - lager - as well as from less important ones, such as dark beer. Real
value growth will be relatively modest due to intensifying competition following the
maturing of beer markets across many national markets within the region.
BEER IN ASIA-PACIFIC: Beer Asia-Pacific:
Market Background - Taxation
While taxation on alcoholic drinks is considered an important source of revenue in most
countries, levels of tax varied across the region. Taxation has of course a direct impact
on pricing and consumption levels. Sales tax/VAT is levied on most countries bar Hong
Kong which - as a free port - has no VAT on any consumer goods. Aside from general VAT or
sales tax, many countries levied an additional tax specifically on beer. Domestic
breweries in China are heavily taxed. Central government generally subjects brewers to a
33% tax on income, as well as 17% VAT and a special tax of RMB220 for each tonne of beer
produced. Consumption tax (tax applied to products considered to be luxury items) of
around 10% is also levied on all alcoholic drinks. Import tax on beer is around 60%,
although there is the possibility that both import tax and excise duties may be reduced
when China offically joins the World Trade Organisation (WTO).
In Japan, beer typically attracts a tax rate of around 45%. In addition, VAT - now at 5%
- is also levied, making beer the most highly-taxed alcoholic beverage in Japan, above
whisky and brandy, which is typically taxed at 37.6%. Although tax on alcoholic drinks
and sales tax account for such a high proportion of the retail price of beer, there is
still sufficient margin left for manufacturers to make a profit. Recommended retail
prices are rarely adhered to, with the exception of outlets such as convenience stores,
where good location and long opening hours allow retailers to charge full price. Most
retailers are able to discount beer and remain competitive, while taking around 10% of
the price as a profit margin.
In Taiwan, under a new tax law, all alcoholic drinks are liable for 5% VAT. All imports
entering Taiwan through one of its five ports are required to pay 0.4% in "harbour
construction tax". Goods entering Taiwan by air freight or parcel post are exempted from
this tariff. Dependent on bilateral trade agreements between Taiwan and other countries,
import tariffs may or may not be levied on foreign alcoholic drinks after the new alcohol
tax laws come into force.
In Singapore, a specific rate of duty is applied on beer imported into or manufactured
in Singapore. The rate of duty is expressed on a specific amount per unit of weight,
volume or quantity of dutiable goods, such as S$30.00 per litre. In addition to the
import duty, a Goods & Services Tax (GST) is payable at 3.0% of the sum of duty and Cost,
Insurance & Freight (CIF) value of liquors released for local sale.
In Indonesia, an importer of alcoholic drinks must pay import duty, VAT as well as an
additional sales tax on luxury goods. In addition, excise duty on alcoholic drinks is
also applied on the basis of the retail selling price per litre and/or the content of
ethyl alcohol.
In Vietnam, import and excise duty is 100% for all brands of beer. This rate is levied
on a Customs `check price' for the particular brand involved. According to Decision
68/2007/QD-BTC, issued by the Ministry of Finance, all brands of imported beer have a
check price of US$0.80 per litre. Tax duties were lowered by an average of 20% from
January 2004. However, any savings at consumer level was offset by the imposition of VAT,
which was applied at the same time.
Table 1 Sales Tax/VAT on Beer by Country 2007
% sales tax/VAT
%
India
China
Malaysia
Indonesia
Philippines
South Korea
Vietnam
Thailand
20.0
17.0
15.0
10.0
10.0
10.0
10.0
7.00
2
Japan
Taiwan
Singapore
Hong Kong
5.00
5.00
3.00
-
Source: Euromonitor from Official Statistics
BEER IN ASIA-PACIFIC: Beer Asia-Pacific:
Market Background - Legislation
The alcoholic drinks industry in Asia-Pacific is closely regulated by individual
national governments. As a result, there is wide-ranging legislation governing the
manufacturing, distribution and importing of alcoholic drinks, as well of course their
consumption.
Manufacturing
Domestic beer production is widely protected or controlled by governments across AsiaPacific. This is particularly true for those countries which are the focus for the
leading international brewers. In China, for example, the Chinese government supports 10
large beer conglomerates by giving them favourable financial loans, while in Vietnam the
government retains total control over the larger breweries. As part of its preparations
for joining the World Trade Organisation (WTO), the Taiwanese government introduced
legislation which allowed the private sector to produce alcoholic drinks, albeit with a
number of significant restrictions. In Singapore, domestic players enjoy lower tax rates
in order to give them a competitive advantage over foreign players.
In spite of such protectionist measures, in order to attract foreign investment some
countries, such as Indonesia and India (at local level rather than at central government
level) relaxed legislation regarding the production of alcoholic drinks during 2004. In
India, certain individual states have found it difficult to enforce restrictions on the
production of alcohol. As a result, they relaxed licensing legislation, a move which is
potentially very beneficial to foreign players intent on entering India at a regional
level. By encouraging the entry of foreign players, local governments aim to increase
their tax revenues without having to spend money enforcing stricter controls. However,
India has perhaps the most complex regulatory framework for the alcoholic drinks industry
in Asia-Pacific. This is because whilst licenses for setting up production units are
issued by the central government, it is the state governments which set duties, taxes,
and legislation for retailing and advertising. Unsurprisingly, operating across the whole
of India is therefore like operating in 25 different countries, as states have different
import and export duties, value-added taxes and excise duties, etc.
In contrast to the relatively relaxed albeit complex situation in India, in Indonesia which is a Moslem country - there is still considerable opposition from Moslem pressure
groups regarding the relaxation of legislation on the production of beer, although some
progress has been made, with the devolvement of control regarding the licensing of
distribution to local authorities.
As a free port, legislation in Hong Kong is relatively liberal, with a simple licensing
system in place. All manufacturers are required to apply for an import license in order
to sell alcoholic drinks via their distributors in Hong Kong. Hong Kong has strict
legislation regarding illegal imports. Any offences involving the illegal importing and
selling of alcoholic beverages typically result in imprisonment.
Any changes in legislation in a particular national market can have a profound impact on
the structure of beer industry as a whole. In Japan, for example, changes in the liquor
tax law in 1994 resulted in a sharp rise in applications by small companies requesting
licences to brew their own beer, including restaurant operators as well as sake and wine
producers. By 2007, the number of microbreweries had jumped to 254, underlining the
significant market potential and high consumer demand for craft beers. Distribution
A retailing license is required to sell alcoholic drinks in most countries in AsiaPacific. However, in contrast to what is the case in most Western countries, there are no
strictly enforced limitations on when alcoholic drinks can be sold. Some countries insist
only on controlling the sale of alcohol during special occasions. In the case of
Thailand, for example, alcoholic drinks cannot be sold on religious days and on the eve
of elections. During long holidays such as Songkran and New Year's Eve, the police
increase inspections along main roads to check on drivers, and those found with excessive
levels of alcohol are fined.
3
Unsurprisingly, both China and India have differing licensing policies from region to
region. While in China the application process and requirements regarding the selling of
alcoholic drinks vary according to each individual province, there is a degree of
homogeneity across the country as a whole. In India, however, where the retail
environment is considerably more complex, each individual province can have very
different requirements. In Japan, recent campaigning for the abolition of vending
machines selling alcoholic drinks resulted in the Japan Liquor Merchants Association
proposing a complete ban on this type of vending by 2005. Leading brewers such as Asahi
and Suntory have thus started to reduce their reliance of these machines, re-focusing on
other channels for the sale of beer. As a result of this development, sales through
"other" outlets (which includes vending as well as home delivery, among others) fell in
Japan during the review period.
Singapore is one of the countries with the most comprehensive legislation regarding the
distribution of alcoholic drinks in Asia-Pacific. In practice, Singapore is also the
country where the law is most likely to be strictly enforced, which may not be the case
in countries such as China and Indonesia, where widespread corruption makes enforcement
difficult. In Singapore, legislation stipulates that every importer of alcoholic drinks
has to be registered with the Trade Development Board (TDB). The importer, or their
appointed agent, is also required to apply for a Joint TD Import Permit/ Customs Goods
Services Tax (GST) Payment Permit through the TradeNet System. An enterprise intending to
sell intoxicating liquor through retail or wholesale channels must apply for a liquor
licence from the Liquors Licensing Board (LLB). The legislation governing the sale of
liquor is known as the Liquor Licensing Regulations. Specifically, the Liquor Licensing
Board issues two types of licence: one is for the retail sale of alcoholic drinks for
consumption on the premises, while the other is for the retail and wholesale sale of
alcoholic drinks for consumption off the premises. In addition, a licensee may apply to
transfer his liquor licence to another person for the same premises. The fee payable for
the transfer of a liquor licence is S$10.00. A licensee may also apply to extend the
operating hours of licensed premises.
In Malaysia, there are two types of distribution licences: for the sale of beer through
a public house and sale of beer through a retail store. Retail outlets are not allowed to
place alcoholic drinks next to other products such as soft drinks, which are commonly
bought by customers below the legal drinking age. Importers are also required by law from
1 April 2005 to place a sticker on the back of all alcoholic drinks' products stating the
alcoholic content of the drink.
As a Moslem country, Indonesia has very strict legislation regarding the distribution of
alcoholic drinks. Law No. 22/2004, approved in 2004, states that district authorities
(below the level of provincial government) can independently regulate the distribution of
alcoholic drinks in their area. This allows for a degree of autonomy in so far as
deciding the alcoholic drinks' quota and licences to be given to retail or horeca
outlets. Some local governments have already begun to set annual quotas and apply their
own levies to alcoholic drinks. This new approach to regulating the market can be seen as
a way of distributing income from beer sales to local authorities, whereas previously
revenue went straight into central government's pockets. The full implementation of this
legislation is expected to take until May 2009.
Age Restrictions
By law, it is illegal for persons under the age of 18 or 20 (depending on country) to
purchase alcohol in Asian-Pacific. However, in practice, the law is not strictly enforced
or observed by retailers and catering establishments. In fact, teenage drinkers were one
of the fastest-growing consumer segments during the review period.
Taiwan provides an example of such unregulated selling. Despite the legal age being 18
for the purchase of alcohol, industry sources estimate that teenagers consumed around 25%
of total alcoholic drinks by volume sold in the country in 2007, and the number of
teenage drinkers is still growing. Beer is the alcoholic drink of choice among Taiwanese
teenagers. The use of pop stars and other celebrities to endorse beer drinking on TV and
in newspaper advertisements, combined with a lax attitude towards the sale of alcoholic
drinks to minors among retailers, has been blamed for this disturbing trend.
In China licensed premises are - in theory - not accessible to youngsters under 18;
however, this law is not often enforced. Consumers and shop owners largely ignore the
law, and karaoke bars are even known to employ under-age girls as barmaids.
In Vietnam, sales of alcohol to teenagers is officially frowned upon, and parental
control remains a relatively effective deterrent.
4
BEER IN ASIA-PACIFIC:
Beer Asia-Pacific: Market Background – Consumer Expenditure on Beer
Beer is the most popular alcoholic drink in Asia-Pacific, where a predominantly hot
climate is prevalent across most of the region. An all-year-round tropical climate in
countries such as Vietnam, Taiwan, Singapore and Thailand encourages substantial beer
consumption at home as well as in hotels, restaurants and bars (horeca). Unsurprisingly,
retail spending on beer took half of total alcoholic drinks in most countries in 2007,
representing the highest proportion of expenditure, partly for reasons of economy.
Compared to Eastern Europe, for example, Asia-Pacific consumers spent less on alcoholic
drinks as a proportion of total consumer expenditure, with expenditure in most countries
less than 1%.
The Vietnamese spent the most on alcoholic drinks as a proportion of total consumer
expenditure. The country also spent the highest proportion on beer in the region, which
accounted for around 87% of total alcoholic drinks retail expenditure in 2007. Beer is a
very popular drink in Vietnam, especially in the southern part of the country, where
there are more urban residents who tend to have higher disposable incomes. There is also
a strong influence from Western lifestyles in the south. In addition, the southern
regions have a warm climate, thus contributing to greater demand for cold drinks. The
fact that average disposable income is low in Vietnam makes eating and drinking out less
common than it is in Singapore, for example, concentrating sales through the retail
channel, where prices are lower. China, the most populous country in the world, spends a
relatively high proportion of total retail consumer expenditure on alcoholic drinks (just
over 1%). However, retail expenditure on beer, at around 47% of total alcoholic drinks'
expenditure, was lower than the average for the region, indicating substantial potential
for future development.
Japan had the highest per capita consumption of beer in the region, although retail
expenditure on beer was just average for the region as a whole. This suggests that the
average Japanese consumer is more affluent, as much more is spent on beer through the
horeca channel (proportionally) than through the retail channel.
Table 2 Retail Consumer Expenditure on Beer 2003-2007
US$ million
Japan
China
Thailand
South Korea
India
Taiwan
Vietnam
Hong Kong
Philippines
Singapore
Malaysia
Indonesia
TOTAL
2003
2004
2005
2006
a2007
15,700
2,100.7
2,293.4
849.9
489.1
565.2
422.7
368.5
301.8
163.1
136.2
49.8
23,440
13,426
2,518.8
2,623.2
934.6
531.2
595.9
510.4
427.5
317.7
174.8
160.4
56.7
22,277
11,625
2,701.1
1,955.2
851.0
587.6
615.2
556.2
473.4
291.3
168.5
141.1
80.2
20,045
10,067
2,769.3
1,376.6
594.0
622.0
649.5
539.3
463.4
243.4
141.3
92.6
39.8
17,598
11,043
2,871.8
1,558.3
754.4
702.2
610.5
593.8
486.1
280.2
148.8
89.8
67.9
19,207
Source: Euromonitor from National Statistics
Note: a estimate
Table 3 Retail Consumer Expenditure on Beer as % of Total
Alcoholic Drinks' Retail Consumer Expenditure: 2003-2007
%
Vietnam
2003
81.7
2004
81.1
2005
83.5
2006
87.3
a2007
86.9
5
Taiwan
Hong Kong
Singapore
Thailand
Philippines
Indonesia
Malaysia
Japan
China
South Korea
India
68.8
78.1
80.8
80.8
60.2
44.5
60.5
57.9
45.9
42.1
24.7
70.1
76.5
79.6
80.1
60.0
50.0
57.7
58.0
46.9
41.9
26.8
69.0
76.9
79.3
79.3
60.0
50.0
54.1
57.2
46.5
41.2
28.9
80.8
76.4
78.9
77.9
60.5
54.5
59.4
54.0
46.8
43.0
30.9
80.6
77.4
76.6
73.4
59.5
56.3
54.8
54.7
51.2
41.5
30.4
Source: Euromonitor from National Statistics
Note: a estimate
BEER IN ASIA-PACIFIC:
Beer Asia-Pacific: Market Background - Drink-driving
Drink-driving is a crime in most countries in Asia-Pacific. Failing alcohol tests may
lead to fines, imprisonment, the temporary or permanent loss of a driving licence.
However, the effectiveness of the enforcement of drink-driving laws varies from country
to country. In some countries, such as China, where there is widespread corruption, the
law is not often enforced. Despite regular campaigns against drink-driving in China,
accidents caused by excessive drinking normally peak around festive occasions, such as
Chinese New Year. In large cities a new type of service has been introduced, providing
drivers to help drinkers drive their cars home safely.
Taiwan is facing a rising number of drink-driving accidents. In 2007 alone, the
Taiwanese police cracked down on 166,024 cases of drink driving, up by 21,035 over 2003.
Taipei City, which witnessed the largest proportion of such cases, introduced a series of
tough drink-driving laws designed to combat the menace. Following a public outcry for
tougher laws, the cabinet revised the traffic regulation laws in December 2007, and
imposed stiffer drink-driving penalties. Drivers under the influence of alcohol are to be
fined between NT$15,000 and NT$60,000. Drivers with blood alcohol levels over 0.55mg/l
may face imprisonment. In cases of casualties, the drivers will also charged under
criminal law.
In Singapore, the prescribed limits for the blood alcohol concentration in 2004 were 35
micrograms of alcohol per 100 millilitres of breath, 80 milligrams of alcohol per 100
millilitres of blood. Any person suspected of drink-driving is analysed using the Breath
Evidential Analyser or the Lion Intoxilyser 6000.
The Hong Kong government reviewed drink driving legislation, and introduced lower
alcohol concentration limits under the Road Traffic Ordinance Act, effective from 1
October 2004. The new lowered limits of alcohol concentration are: 22 micrograms of
alcohol in 100 millilitres of breath; 50 micrograms of alcohol in 100 millitres of blood;
67 micrograms of alcohol in 100 millilitres of urine.
In less developed countries, such as Indonesia and Vietnam, drink driving laws are not
strictly enforced. In the case of Indonesia, this is due to a limited budget, which
reduces the number of random breath tests which can be given. Police activity reaches its
peak during Hari Raya Idul Fitri, when many commuters travel back to their hometowns on
buses and in private cars. In Thailand, manufacturers are required to state clearly on
their packaging that those under the influence of alcohol should not drive. Despite the
existence of tough anti-drink-driving legislation, demand for low-/non-alcohol beer
remained low in Asia-Pacific. This was partly due to availability and pricing, as well as
a general indifference to a product which is not heavily promoted or advertised.
BEER IN ASIA-PACIFIC: Beer Asia-Pacific:
Market Background – Drinking Habits
Although eating out is an important part of indigenous culture across Asia-Pacific,
especially in countries strongly influenced by China - which includes Hong Kong, Taiwan
and Singapore - beer drinking habits are fundamentally influenced by the West. Drinking
in Western-style bars and pubs was a growing trend in many national markets such as
6
China, Hong Kong and Thailand between 2003 and 2007. The numbers of female drinkers are
also rising in key markets such as Japan and China.
Chinese business culture dictates that business deals are typically concluded during a
formal dinner, which is invariably accompanied by alcohol. Unsurprisingly, then, China,
Hong Kong, Taiwan and the Chinese community in Malaysia and Singapore share some similar
drinking patterns. Traditional Chinese attitudes do not encourage women to drink alcohol,
the consequence being that women tend to drink less than men, especially in public.
However, there is a growing trend for women of younger generations, especially those from
middle-income households - mainly students and young career women - to drink more.
Chinese culture generally allows for infrequent drinking amongst men of all classes,
although tradition does include occasional drinking to excess in order to celebrate an
event or special occasion, often to do with business or family. The drinking culture is
not then focused on regular drinking of moderate amounts, and thus most men have a
relatively low alcohol tolerance.
In China, alcohol is typically drunk with meals outside the home, although more families
now have some beer stored in the fridge so that the parents - typically the father -can
have a beer with the evening meal. In the vast rural areas, few Chinese will drink beer
outside the meal setting, and there is no established tradition of drinking in pubs or
bars. In large cities, however, younger Chinese are becoming more used to the idea of
going out to a pub for a social drink. Men tend to go out to drink more than women, and
this is usually associated with entertaining in a business context. Indeed, late night
drinking among Chinese men is increasing, and is becoming a significant social problem.
In terms of the wider range of alcoholic drinks, more developed national markets such as
Singapore and Japan witnessed an increase in the consumption of wine over beer as a
result of changing lifestyles and the increasing sophistication of drinking habits during
the review period.
Drink driving legislation also has an influence on drinking habits. In Taiwan, for
example, the recent imposition of tougher drink driving laws had an effect on drinking
patterns, which were imposed due to an alarming increase in the number of fatal drink
driving accidents. As the media focused on the drink-driving problem, amidst widespread
public outrage, many beer drinkers reduced consumption during social gatherings, which is
the typical drinking occasion in the country. Local drinking culture encourages
aggressive toasting and drinking games during most kinds of social functions, be they
weddings, funerals or political rallies.
As the world's largest Muslim nation (in terms of population), Indonesia has a
restricted market for alcoholic drinks. This in itself has created a buoyant market for
soft drinks. The open consumption of alcoholic drinks is not acceptable, either legally
or socially. This restriction is relaxed in popular tourist destinations, such as Bali.
Alcohol is not therefore part of general social intercourse in much of Indonesian
society. Despite this, beer retains a certain popularity, with several local brands as
well as international bottled lagers available. Wine and spirits are less popular and are
generally comparatively expensive, especially when consumed in restaurants. Industry
observers believe that the increase in beer consumption in 2007 was more the result of
new drinkers beginning to drink than an increase in current consumption by regular
drinkers.
Japanese people usually drink with their co-workers. The section head treats the staff
to a drink after work to maintain harmony and a homely atmosphere in the office. In
Japanese society it is also acceptable to get very drunk; as this is seen as an
expression of how much you enjoy the company. In public, Japanese people are typically
formal, although they relax considerably during informal drinking parties.
BEER IN ASIA-PACIFIC: Beer Asia-Pacific:
Market Background - Per Capita Consumption
Per capita consumption of beer in Asia-Pacific grew by 1.5 litres between 2003 and 2007,
having reached over nine litres by the latter year. Generally speaking, growth was
encouraged by rising levels of disposable income across the region, as well as changing
drinking habits. In addition, slow population growth in some national markets particularly China, where the 'one child per family' rule is strictly enforced - was also
partly responsible for the rise in per capita consumption, as China is a key influence on
regional growth. With the most stringent population control policy in the region,
7
combined with an enlarged production capacity, per capita consumption in China, at almost
14 litres in 2007, saw the most significant growth in terms of future potential.
Japan, the economic superpower in Asia-Pacific, featured the highest per capita
consumption in the region, at over 53 litres in 2007, almost six times more than the
average figure for the region. As the beer market matured in Japan during the early years
of the review period, per capita consumption contracted by around half litre between 2003
and 2007. This pattern was also seen in other relatively developed economies across the
region, including Hong Kong, Taiwan and Singapore.
The highest levels of growth in per capita consumption were recorded in countries such
as South Korea, China and Vietnam. South Korea saw the fastest growth of all, with per
capita consumption up by nearly 8 litres over the 5-year period.
Table 4 Beer Consumption by Country 2003-2007
Litres per head
2003
2004
2005
2006
2007
Japan
53.8
53.6
53.4
53.4
53.2
South Korea
29.7
30.6
30.1
31.8
37.5
Hong Kong
34.3
35.3
35.4
33.8
33.7
Taiwan
24.4
25.0
23.3
24.1
21.9
Thailand
10.6
12.1
14.8
19.2
18.5
Singapore
15.1
15.1
15.1
13.8
13.8
China
10.1
11.2
12.4
13.0
13.7
Philippines
11.3
11.1
11.0
10.8
10.6
Vietnam
4.8
5.9
6.8
7.8
8.7
Malaysia
5.7
6.1
6.3
6.2
5.7
Indonesia
0.9
0.9
0.9
0.6
0.7
India
0.4
0.4
0.4
0.5
0.5
Other AsiaPacific
1.8
1.9
2.1
2.5
2.3
AVERAGE
7.6
8.0
8.3
8.9
9.1
Source: Official statistics, trade associations, trade
press, company research, store checks, trade interviews,
Euromonitor estimates
BEER IN ASIA-PACIFIC: Beer Asia-Pacific:
Market Background - Advertising
Restrictions on alcohol drinks' advertising are relatively few in non-Muslim countries,
with various forms of advertising being possible. TV is the most popular advertising
medium in many countries, including Japan, China, and Singapore.
In Japan, advertising expenditure on beer stood at Yen 68.4 billion in 2007, a decrease
of 5% over the previous year. Television accounted for 66% of total adspend, reflecting
television ownership rates of almost 95%. Newspapers also featured numerous advertising
campaigns, specifically targeting businessmen. Japanese advertising campaigns for beer
featured a number of famous celebrities. Female consumers are an increasingly targeted
consumer segment.
The Singaporean government does not impose any strict restrictions regarding the
advertising of alcoholic drinks. Most advertisements are on television and/or radio, in
newspapers, leading lifestyle and nightlife magazines and on billboards. Sponsorship of
certain TV programmes is also a common way of ensuring effective exposure to a target
audience, and often these programmes are sports-related.
Taiwan saw a change in advertising legislation during the review period. Advertisements
for alcoholic drinks were banned in Taiwan between 1994 and 2002. A relaxation in
advertising regulations in 2003 helped stave off a decline in alcohol sales.
Nevertheless, there are still some restrictions for advertising through certain types of
media. While manufacturers and importers can advertise their products freely in
newspapers and magazines, alcoholic drinks advertising is only allowed on cable
television between 9.00pm to 6.00am, and 9.30pm and 6.00am for radio and terrestial
television.
8
Religion is an important factor in forming official attitudes to alcoholic drinks
advertising. As a principally Catholic country, the Philippines established minimum
requirements regarding the advertising of liquor in both print and broadcast media in
2005. Under the recently-introduced measures, advertising in publications with more than
10,000 readers under the age of 21 will be restricted to text-only advertising, in blackand-white print. Meanwhile, liquor advertising on television between 07.00hrs to 22.00hrs
will be limited to a picture of the beverage "with factual, objective audio information"
about the product. The bill also provides for restrictions on alcoholic drinks'
manufacturers seeking to sponsor events.
In Muslim countries, such as Indonesia and Malaysia, there are stringent restrictions on
the advertising and promotion of alcoholic drinks. In Malaysia, for example, advertising
through broadcast media, on billboards and on bus/train panels is prohibited. It is,
however, allowed in cinemas and non-Malay language print media. The beer industry is
known for using sexually-provocative models for the purposes of advertising. At Chinese
restaurants and some pubs, Carlsberg Brewery Malaysia and Guinness Anchor Berhad hired
women to promote their beers by approaching customers directly.
In Vietnam, only beer can be advertised through mass media such as television, radio and
at sporting occasions, but this is limited to one brand name per newspaper, television
programme or magazine. Carlsberg advertises on television by sponsoring live telecasts of
English Premiership football matches. Heineken and Tiger were sponsors for sporting
events in Ho Chi Minh City and other southern provinces, the major regional markets for
these brands.
Total volume sales of beer stood at 31 billion litres in Asia-Pacific in 2007, having
increased by over 4% on the previous year, with value sales equivalent to around US$81
billion. Growth was stifled by the slow recovery of consumer confidence in 2007, which
had been depressed by the financial crisis of 2002-2003. Sluggish domestic demand in
China coupled with recession in Japan were the main contributing factors to slowing
regional growth over the 5-year period. It should be noted, however, that less developed
national markets such as India, Vietnam and Indonesia recorded double-digit growth in
both volume and local currency constant value terms during 2003-2007. This growth was
generally from a low base. India, for example, has the lowest per capita consumption of
beer in the region, at just half litre in 2007, which was much lower than the regional
average level of over nine litres per head in the same year.
China represented the largest national market in volume terms in Asia-Pacific in 2007,
accounting for 56% of total volume sales. However, China only held around 18% of total
regional value sales in the same year, indicating that the price of beer is relatively
low in China and competition is mainly concentrated in the economy lager subsector.
China's beer market in volume terms was of course underpinned by its large population,
which represented over 44% of the total regional population in 2007. Rising living
standards, combined with the increased production of beer in China, was the main reason
behind positive growth. However, 2007 saw slower volume growth than the CAGR of over 9%
seen during the review period as a whole, reflecting the fact that demand for general
consumer goods was sluggish and beer remains something of a luxury for the average
Chinese consumer, 70% of whom live in poor rural areas. Urban-based consumers are
becoming more cautious in spending due to a lack of job security, as massive redundancies
within state-owned enterprises have shaken consumer confidence.
Japan was by far the most valuable national market throughout the review period, with
sales reaching a value of just over US$50 billion by 2007. This economic superpower also
had the highest per capita consumption in Asia-Pacific, at around 53 litres in 2007.
Despite this, recession in Japan affected the beer market, reflected in its declining
share of regional sales in both value and volume terms. The growing popularity of other
alcoholic drinks, such as wine and cocktails, reduced demand for beer. In addition,
growing health awareness resulted in a shift away from beer to soft drinks. Moderate
growth in the non-/low-alcohol beer sector - which is small compared to other sectors failed to offset the decline in the overall market.
The fastest growing national market in 2007 was South Korea, with sales up by nearly 19%
in volume and 2% in local currency constant value terms. The Korean beer market was
driven by the revival in levels of disposable income following the financial crisis of
2002-2003. Restored consumer confidence boosted demand for novelty products such as
stout, although growth was from a very low base. The increasing number of younger
consumers and female drinkers favoured growth in beer sales.
9
The beer market in Indonesia bounced back in 2007 after several years of declining sales
between 2003 and 2006, with growth of around 14% in both volume and local currency
constant value terms. During the economic turmoil occasioned by financial crisis,
distribution and production was disrupted, mainly by factors such as social unrest and
looting. Constrained by religion and the lack of an established drinking tradition,
Indonesian beer drinkers drank less in quantity as well as in frequency compared to some
of their regional neighbours. Growth in 2007 was partly the result of the emergence of
new drinkers rather than an increase in consumption by regular drinkers.
Thailand, Malaysia and Taiwan suffered a decline in beer sales 2007 as a result of a
number of factors. In Malaysia, for example, the decline was caused by an increase in
import and excise duties, which was passed on to consumers who, being price sensitive,
reduced consumption. In Thailand, the boom in economy lager failed to compensate for a
steep fall in sales of standard lager, which was affected by the repercussions of the
financial crisis.
Table 5 Sales of Beer by Country 2003-2007
Sales by volume and value
Million litres
China
Japan
South Korea
Thailand
Philippines
Vietnam
India
Taiwan
Hong Kong
Indonesia
Malaysia
Singapore
Other AsiaPacific
TOTAL
US$ billion
Japan
China
South Korea
Taiwan
Hong Kong
Thailand
Malaysia
Singapore
Philippines
Vietnam
India
Indonesia
Other AsiaPacific
TOTAL
2003
2004
2005
2006
2007
12,241
6,757.4
1,341.3
618.2
769.0
357.4
352.2
519.1
210.9
179.4
118.8
51.3
13,768
6,750.2
1,391.3
709.7
775.8
441.3
373.3
536.1
222.8
169.0
128.8
54.3
15,268
6,740.6
1,382.9
877.4
784.0
519.1
412.3
505.5
230.1
175.3
136.1
56.0
16,478
6,758.3
1,467.8
1,153.6
787.8
610.6
450.9
526.5
222.3
132.7
137.9
53.3
17,544
6,736.2
1,744.2
1,120.5
792.5
695.7
503.0
481.8
224.9
151.0
128.7
55.4
839.5
24,356
902.0
26,223
1,064.1
28,151
1,242.0
30,022
1,169.2
31,347
63.7
10.0
2.8
2.8
1.5
1.2
1.6
0.9
1.0
0.4
0.6
0.9
55.8
11.4
6.2
3.0
1.6
1.3
1.7
1.1
1.1
0.5
0.7
0.9
50.2
12.8
5.3
2.7
1.7
1.3
1.6
1.1
1.0
0.7
0.7
0.8
46.0
13.9
3.5
2.3
1.6
1.2
1.1
0.9
0.8
0.8
0.7
0.2
50.4
14.4
4.5
2.2
1.7
1.4
1.1
1.0
0.9
0.8
0.8
0.4
1.4
88.8
1.5
86.8
1.6
81.5
1.6
74.7
1.6
81.3
Source: Official statistics, trade associations, trade
press, company research, store checks, trade interviews,
Euromonitor estimates
Table 6 Sales of Beer by Country: % Analysis 2003-2007 % sales by volume and value
2003
2004
2005
2006
2007
10
% volume
analysis
China
Japan
South Korea
Thailand
Philippines
Vietnam
India
Taiwan
Hong Kong
Indonesia
Malaysia
Singapore
Other AsiaPacific
TOTAL
% value
analysis
Japan
China
South Korea
Taiwan
Hong Kong
Thailand
Malaysia
Singapore
Philippines
Vietnam
India
Indonesia
Other AsiaPacific
TOTAL
50.3
27.7
5.5
2.5
3.2
1.5
1.4
2.1
0.9
0.7
0.5
0.2
52.5
25.7
5.3
2.7
3.0
1.7
1.4
2.0
0.8
0.6
0.5
0.2
54.2
23.9
4.9
3.1
2.8
1.8
1.5
1.8
0.8
0.6
0.5
0.2
54.9
22.5
4.9
3.8
2.6
2.0
1.5
1.8
0.7
0.4
0.5
0.2
56.0
21.5
5.6
3.6
2.5
2.2
1.6
1.5
0.7
0.5
0.4
0.2
3.4
100.0
3.4
100.0
3.8
100.0
4.1
100.0
3.7
100.0
71.7
11.3
3.1
3.1
1.7
1.3
1.7
1.1
1.1
0.5
0.7
1.0
64.3
13.1
7.2
3.4
1.8
1.5
1.9
1.3
1.2
0.6
0.8
1.1
61.6
15.7
6.5
3.3
2.1
1.6
2.0
1.3
1.3
0.8
0.9
1.0
61.5
18.6
4.7
3.1
2.2
1.7
1.5
1.2
1.1
1.0
1.0
0.3
62.0
17.7
5.5
2.7
2.1
1.7
1.4
1.2
1.2
1.0
1.0
0.5
1.6
100.0
1.8
100.0
2.0
100.0
2.1
100.0
2.0
100.0
Source: Euromonitor
Table 7 Sales of Beer by Country: % Growth 2003/2007
% growth by volume and value
% volume growth
South Korea
Vietnam
Indonesia
India
China
Singapore
Hong Kong
Philippines
Japan
Thailand
Malaysia
Taiwan
Other AsiaPacific
TOTAL
% local
currency
2006/2007
2003/2007
CAGR
2003/2007
Total
18.8
13.9
13.8
11.6
6.5
3.9
1.2
0.6
-0.30
-2.90
-6.70
-8.50
6.8
18.1
-4.20
9.3
9.4
1.9
1.6
0.8
-0.10
16.0
2.0
-1.80
30.0
94.7
-15.8
42.8
43.3
8.0
6.6
3.1
-0.30
81.2
8.4
-7.20
-5.90
4.4
8.6
6.5
39.3
28.7
11
constant value
growth
India
Vietnam
Indonesia
Singapore
China
Hong Kong
South Korea
Japan
Philippines
Thailand
Malaysia
Taiwan
15.4
13.8
13.5
5.5
5.2
2.7
2.0
-0.20
-0.20
-8.30
-9.80
-11.8
8.7
24.4
-11.0
2.3
6.9
-0.20
20.5
-0.60
0.5
9.0
-1.50
-4.20
39.4
139.7
-37.2
9.5
30.4
-1.00
110.8
-2.20
2.1
41.3
-5.80
-15.8
Source: Euromonitor
Lager was by far the most important sector in both volume and value terms, accounting
for over 98% of total volume sales and close to 95% of value sales in 2007. Lager's
dominance came from factors such as price, climate and established beer-drinking
traditions. China - the key national market in volume terms - was the most influential in
underpinning the dominance of lager, as this type of beer accounted for virtually all
beer sales in the country throughout the review period.
The positive growth in lager sales during the review period was boosted by the rapid
development in the economy lager subsector, especially in countries such as Thailand,
China, Japan and the Philippines. In Thailand, for example, economy lager grew by nearly
273% in volume terms in 2007 alone, a direct result of the fall in consumers' purchasing
power during the financial crisis, which caused them to trade down to cheaper products.
Unsurprisingly, at a regional level, strong sales of economy lager forced standard lager
into decline, given that levels of disposable income remained low in Asia-Pacific, and
were affected by financial crisis in 2002-2006, a factor which also constrained the
development of the premium lager subsector in most countries. Thailand suffered the
greatest loss in terms of the standard lager subsector, with a decline of over 72% in
volume terms in 2007. Japan also recorded a reduction of consumption of standard lager,
down by nearly 10% in volume terms during 2007. The phenomenal growth of economy lager,
comprising happoshu low-malt beers and private label brands, succeeded in eroding market
share from the once all-powerful standard lager subsector in Japan. Premium lager is
naturally the subsector most sensitive to fluctuations in levels of disposable income,
and unsurprisingly it experienced only moderate volume growth, with an increase of just
over 3% in 2007, boosted by widening distribution rather than any marked increase in
demand. Growth was also boosted by the recovery in levels of real income, particularly
in relatively developed national markets such as Hong Kong, South Korea and Singapore.
Singapore is a good example of the pattern of development of premium lager. Asia Pacific
Breweries and other importers engaged in intensive advertising and promotional activities
in order to get their new premium products established in the market as they saw
consumers moving away from traditional products to more distinctive and exotic premium
lagers. Trendy consumers in their 20s and 30s were especially receptive to premium beers,
since they are more influenced by the Western culture than older consumers.
Dark beer has never been a popular drink in Asia-Pacific, with negligible sales in most
countries throughout the review period. Hong Kong, the Philippines and Taiwan were the
few national markets with appreciable sales of dark beer. Marginal growth derived mainly
from Hong Kong and the Philippines, which benefited from an enlarged consumer base in
2007, especially in Hong Kong, where a growing number of local Chinese consumers are
starting to experiment with more exotic products, while Western expatriates continue to
be the main consumers.
Stout remained a small sector in Asia-Pacific throughout the review period, with a
slight decline in volume terms, although there was an increase of over 6% in value terms
in 2007. Taiwan was most affected in 2007, with sales down by over 50% in volume terms on
the previous year. In general, Asian-Pacific consumers are not used to the taste of
stout, and consumption is mainly out of curiosity and drinkers' willingness to
experiment. While stout sales were negligible in the region's largest market by volume,
China, the sector suffered a sharp decline in both volume and value terms in Malaysia in
2007. There were several factors behind this decline. Besides the hike in excise duty and
12
the economic slowdown, a lack of interest from younger consumers had an adverse effect on
sales of stout, which was not promoted as a trendy product, and was hence mainly consumed
by blue-collar workers and ex-pats.
The non-/low-alcohol beer sector performed poorly, with sales declining marginally in
2007. As was the case in stout, the vast majority of consumers across the region are not
interested in the product. One of the reasons is the relatively high price of the product
in comparison to soft drinks, which are the natural alternative for people who wish an
alcohol-free drink. As a consequence, the sector saw appreciable volume sales in only a
few countries, such as South Korea, the Philippines and Japan during the review period.
Japan, a key influence on regional growth patterns, accounted for over 90% of total
regional volume sales of this type of beer in 2007. As a consequence, the decline in
sales of non-/low-alcohol sector in Japan caused a fall in sales at a regional level.
Table 8 Sales of Beer by Sector: 2003-2007
Sales by volume and value
Million litres
Lager
- Premium lager
- Standard lager
- Economy lager
Dark beer
Stout
Non-/low-alcohol
beer
TOTAL
US$ billion
Lager
- Premium lager
- Standard lager
- Economy lager
Dark beer
Stout
Non-/low-alcohol
beer
TOTAL
Million litres
Lager
- Premium lager
- Standard lager
- Economy lager
Dark beer
Stout
Non-/low-alcohol
beer
TOTAL
US$ billion
Lager
- Premium lager
- Standard lager
- Economy lager
Dark beer
Stout
Non-/low-alcohol
beer
TOTAL
2003
2004
2005
23,917
2,593.0
9,129.1
12,195
215.5
145.0
78.1
25,771
2,710.0
9,475.3
13,586
223.0
149.5
79.2
27,693
2,811.8
9,855.6
15,025
224.9
153.4
80.3
24,356
26,223
28,151
83.8
23.6
48.6
11.7
2.1
2.0
0.8
82.1
21.7
47.7
12.7
2.0
2.0
0.7
77.1
20.4
42.7
14.0
1.9
1.9
0.6
88.8
86.8
2006
2007
81.5
2006/9 %
growth
29,570
2,860.8
9,759.8
16,949
225.6
145.8
80.8
30,892
2,960.6
8,847.4
19,084
229.7
144.8
80.7
4.5
3.5
-9.30
12.6
1.8
-0.70
-0.10
30,022
31,347
4.4
70.9
19.1
35.1
16.7
1.7
1.5
0.6
77.1
21.3
36.0
19.8
1.8
1.6
0.7
8.8
11.2
2.7
19.0
7.3
6.4
11.2
74.7
81.3
8.7
13
Source: Official statistics, trade associations, trade
press, company research, store checks, trade interviews,
Euromonitor estimates
Glass was the most important packaging format in most Asian-Pacific countries, holding
over 68% of total regional volume sales in 2007. In India, glass bottles represented
nearly 100% of beer sales in 2007. As glass bottles are the industry standard for beer
packaging in India, other formats have little chance of challenging its position in the
near future. Despite this, the can format became more fashionable amongst affluent
consumers during the review period, as it is used principally for expensive imports.
Unsurprisingly, most Indian consumers stay loyal to the bottle format.
In some countries in Asia-Pacific, such as Japan, China, the Philippines and India,
returnable glass bottles are still the dominant packaging format. In China, however,
recently some local authorities have changed regulations in order to eliminate the
circulation of sub-standard glass bottles. It is interesting to note that in relatively
developed national markets such as Hong Kong, Taiwan and Singapore, an increasing number
of predominantly younger consumers see drinking beer from a glass bottle as being more
fashionable than drinking from a can. In horeca channels, bottled beer is particularly
popular, which affected the keg format.
Cans was the second most popular packaging format in the region, increasing its share in
many countries, including China, Japan, Thailand and the Philippines. Japan featured the
highest proportion of total sales taken by cans, where the format accounted for over half
in 2007, mainly due to the format's advantages regarding durability, recyclability and
storage.
The keg format is mostly used in horeca channels, taking around 8% of total volume sales
in 2007 at a regional level. Singapore featured the highest proportion of beer sold in
kegs in 2007, with the format accounting for over 61% of total volume sales. Eating and
drinking out is commonplace among Singaporean consumers, and draught beers are mainly
served in catering establishments, where they continue to be popular, despite the growing
availability of premium beer in glass bottles during the review period.
While the plastic format saw negligible sales across the region throughout the review
period, formats included in "others" took a small share in China and the Philippines. In
China, lager sold loose proved popular in some coastal cities during the Summer. Some
manufacturers set up mobile stands in residential areas and distributed free samples to
consumers in an attempt to stimulate demand.
Table 9 Sales of Beer by Country and Packaging Format: % Analysis 2007
% volume analysis
China
Hong Kong
India
Indonesia
Japan
Malaysia
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam
Other AsiaPacific
TOTAL
Can
Glass
Plast
ic
12.0
45.0
0.4
29.0
51.0
24.0
23.0
29.0
20.0
42.6
25.0
15.5
80.5
37.0
99.6
62.2
39.2
63.0
70.5
10.0
60.0
56.4
70.0
58.7
-
7.0
18.0
8.8
9.8
13.0
2.0
61.0
20.0
1.0
5.0
25.8
0.5
4.5
-
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
22.7
22.7
68.3
68.3
-
8.6
8.6
0.4
0.4
100.0
100.0
Keg Others
Total
Source: Euromonitor
14
The beer market in Asia-Pacific is fragmented, mostly between regional and domestic
brewers. Overall, Japanese brewers maintained a certain dominance, while Chinese
producers increased share at a regional level in 2007. The two leading brewers in AsiaPacific were the two leading manufacturers of beer in Japan. However, in 2007, the stateowned Chinese conglomerate Tsingtao Breweries Co was the best performer, improving in
third place and threatening Asahi's second position.
Japanese brewers
Kirin's leading position stemmed from its importance in its own domestic market - the
most important by far in value terms - where it accounted for over one third of total
beer sales in 2007. Despite Kirin's success with its newest brand Tanrei in Japan, the
company lost some share at a regional level in 2007, partly due to a poor performance in
Taiwan. Tanrei was a launched in 2003 in Japan, a happoshu low-malt beer with an alcohol
content of 5.5%. This draught beer - very reasonably priced for the Japanese market - was
well received.
Tougher domestic competition prompted Kirin to look into expansion both domestically and
internationally. At the end of 2007, Kirin Brewery and Anheuser-Busch renegotiated a
joint venture, which allowed Kirin Brewery to brew all Anheuser-Busch's brands in Japan,
as well as allowing Kirin Brewery's marketing team to pitch Budweiser to the Japanese
consumer. Kirin's international focus is centred very much on the potentially very
lucrative Chinese market. Kirin is involved in a joint venture in China - Zhuhai Kirin
President Brewery (based in Guangdong province) - and it acquired a 45% stake in Lion
Nathan of New Zealand (which operates around Shanghai) in 2003, thus strengthening
Kirin's geographical presence in China, a key are given the country's vast size. The
company further announced its intention to expand its operations to more provinces in
China during 2007.
Asahi was Kirin's closest rival in both its domestic market and in the region as a
whole. The eponymous Asahi brand is the company's key product, enjoying a significant
presence in Japan and notable shares in Hong Kong, Malaysia,
Singapore and Taiwan. Asahi's position derived mainly from its importance in its domestic
market, although the company is actively involved in expanding its oversees operations.
It is reported that China will be the main target for international expansion during the
next five years.
Local players
Local players are particularly strong in the region, as consumers are accustomed to the
taste of local beverages. Domestic companies commanded important shares in national
markets such as China (Tsingtao), Thailand (Thai Beer), Singapore (Tiger Beer), and
Taiwan (Taiwan Tobacco & Wine Board).
Tsingtao's impressive performance at a regional level was boosted by a strong
performance in its domestic market where it took over medium/smaller-sized players across
China, broadening its brand portfolio as well as strengthening its share in selected
export markets. Although the company only had significant shares in Hong Kong and
Singapore, its importance in the beer market in China firmly underpinned its regional
position. To counter competition from foreign breweries, the Chinese government has
encouraged and supported domestic companies in their fight to expand and secure a firm
foothold at a national level. This was also considered a key aim as a national strategy
for preparation to join the World Trade Organisation. During 2007/2008 Tsingtao
strengthened its position in southern China. In 2004 the company purchased Huangmei
Brewery Co (previously owned by Australian Fosters Brewery Co Ltd) in Zhuhai,
establishing Tsingtao Zhuhai Co Ltd. During 2005 Tsingtao Zhuhai Co Ltd launched a new
brand - Xiang Jiang beer - to compete directly with existing player Zhuhai Kirin
President Brewery Co Ltd, whose major brands are Haizhu and Kirin Ichband. Around the
same time the company also attempted to gain more experience by going into partnership
with brewers with international operations, setting up the joint venture Shenzhen
Tstingtao Beer Asahi Brewery, which it nominally controlled with a 51% stake in 2004.
San Miguel Corp is another strong regional player in Asia-Pacific, its position
underpinned by a large brand portfolio (Blue Ice, Pale Pilser, Red Horse and San Miguel).
Despite a weaker performance in 2007 in comparison to 2003, mainly due to a weak domestic
market, the company still maintained over 70% of total volume sales in the Philippines.
The company also gained share in Hong Kong, India and Singapore during the same year.
Multinational presence
Global players such as Heineken and Carlsberg had a significant share of the beer market
in Asia-Pacific. However, penetration was made difficult by Asian consumer's strong
15
loyalty to domestic or regional brands, which normally feature lower prices and are more
familiar in terms of taste to local consumers. The slow recovery of the economy in the
region also limited market penetration for global players, who tend to market premium
lager products. Heineken, a typical premium brand, is specifically marketed through the
horeca channel in countries such as China and Thailand. However, Heineken's sales at the
retail level remain minimal, due to its high price.
Private label
Private label brands were present in relatively developed national markets such as Japan
and Hong Kong. However, the role of private label remained relatively marginal at a
regional level due to constant price reductions in branded products during the 2003-2007
period. In Japan, for example, the launch of economy brands from the top domestic
manufacturers - with the exception of Asahi - put pressure on private label brands. The
Japanese consumer can readily purchase crates of bottled beer, and the empty bottles can
be returned to the outlet and a deposit refunded. Bulk buying in this manner means that
consumers get a substantial discount over the standard price, thus further reducing the
attractiveness of private label products. Private label products do not generally command
sufficient consumer loyalty to make this method economically viable.
Table 10 Company Shares of Beer 2003-2007
% share
Kirin Brewery Co Ltd
Asahi Breweries Ltd
Tsingtao Brewery Co
Hite Co Ltd, The
Sapporo Breweries Ltd
Beijing Yanjing
Beer Group
San Miguel Corp
Doosan
Suntory Ltd
China Resources
Enterprises Co Ltd
Beer Thai (1994)
Guangzhou Zhujiang
Brewery Co Ltd
Anheuser-Busch Cos
Inc
Sichuan Blue Sword
Group
Heineken NV
Chongqing Brewery
Group
Taiwan Tobacco &
Wine Board
Boon Rawd Brewery
Carlsberg A/S
Private label
Others
TOTAL
2003
2007
7.4
6.6
1.5
2.5
2.8
7.3
6.2
2.9
2.8
2.8
1.7
2.3
2.0
1.6
2.3
2.2
2.1
1.9
1.3
0.4
1.9
1.7
1.1
1.5
1.3
1.5
1.1
1.4
1.4
1.4
1.3
1.3
1.4
2.4
1.0
0.1
58.8
100.0
1.3
1.1
1.1
0.3
55.0
100.0
Source: Euromonitor
BEER IN ASIA-PACIFIC: Beer Asia-Pacific:
Distribution - Retail vs Horeca Trends
Asia-Pacific, in comparison with other emerging regions such as Eastern Europe, featured
relatively high levels of horeca sales, the channel accounting for over 40% of total
volume sales in 2007. Socialising in catering establishments either for the purposes of
16
business entertainment or family gatherings is part of the culture in many Asian
countries, particularly China, Hong Kong, Singapore, Taiwan and Malaysia. Cheap labour
across the region and low costs enable horeca outlets to offer affordable prices to
consumers across most countries.
The extreme in Asia-Pacific was represented by Singapore, with the highest proportion of
horeca sales in 2007, at over 82% of total volume and nearly 95% of total value sales.
The improved economic health and attractive marketing promotions held in catering
establishments were the main reasons for such high levels of horeca sales. As the economy
recuperated from the regional currency crisis, a higher proportion of beer was consumed
in coffee shops, drinking stalls in markets and pubs than in 2006. Horeca outlets have
also increased their total volume market share as a result of successful promotions. The
high density of pubs and bars in central locations, long operating hours (they are
typically open until 03.00hrs), plus the widespread institution of "happy hour" in an
attempt to keep sales volume up, sustained the dominance of the horeca channel throughout
the review period. Moreover, well-established tourism in Singapore is another factor
behind the high proportion of horeca sales. Interestingly, Japan featured the highest
proportion of retail sales, but relatively low beer sales through horeca channels. There
are several factors behind this. Firstly, the retail market for beer in Japan is well
developed, aided by the high penetration of vending machines which - until very recently
- further served to maintain retail sales. Secondly, there is a long tradition of
drinking beer at home in Japan, particularly with meals. Companies such as Asahi even
market snack products such as Beer Partner, specifically to accompany beer drinking at
home. Lager is the most popular type of beer, and many households purchase bottled beer
in bulk from local suppliers who deliver to the door and collect any empties. Finally,
despite the fact that corporate entertainment is an integral part of Japanese business
life, average consumers are put off from expensive entertainment areas such as hostessed
snack bars or karaoke rooms due to very high prices.
As was the case in Eastern Europe, foreign imports were normally first introduced to
many Asian countries such as Taiwan, Thailand and China through the horeca channel. In
China, for example, the retail market was dominated by standard and economy products,
mainly produced by domestic brewers, while premium products took a higher proportion of
horeca sales in 2007. The rapid development of bars selling beer in large cities
attracted younger consumers and affluent businessmen, who are more adventurous in
experimenting with less well-known products. Constant promotions by premium lager
manufacturers, importers and distributors also had a positive impact on horeca sales.
Heineken claims that it is the fastest growing premium brand in the horeca channel in
China.
Vietnam has one of the highest proportion of horeca sales in Asia-Pacific. This is the
result of well-established local drinking habits, where Vietnamese men tend to gather
with friends at restaurants and drink beer with their meal. Drinks are frequently only
slightly more expensive than through retail channels, in a deliberate attempt to attract
customers into the restaurant. Low price strategies and prompt door-to-door delivery
service to horeca outlets adopted by famous brands such as Tiger and San Miguel also
served to boost horeca sales. Finally, an increasing level of disposable income,
especially in urban areas, coupled with the increasing influence of Western lifestyles
has also contributed to the growing popularity of beer in Vietnam.
Table 11 Retail versus Horeca Sales of Beer by Country: % Analysis 2007
% analysis of sales by volume and value
% volume
Singapore
Vietnam
Malaysia
Indonesia
Taiwan
Thailand
China
South Korea
Retail
Horeca
TOTAL
17.6
19.6
30.0
37.2
50.2
51.0
54.8
55.0
82.4
80.4
70.0
62.8
49.8
49.0
45.2
45.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
17
Hong Kong
India
Philippines
Japan
Other AsiaPacific
TOTAL
% value
Singapore
Malaysia
Vietnam
Hong Kong
Taiwan
Indonesia
South Korea
China
Japan
Philippines
Thailand
India
Other AsiaPacific
TOTAL
Source: Euromonitor
57.8
70.1
72.3
77.6
42.2
29.9
27.7
22.4
100.0
100.0
100.0
100.0
59.7
59.4
40.3
40.6
100.0
100.0
5.3
13.4
18.1
21.7
26.8
28.4
38.3
42.6
43.4
51.6
59.8
60.2
94.7
86.6
81.9
78.3
73.2
71.6
61.7
57.4
56.6
48.4
40.2
39.8
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
53.6
41.7
46.4
58.3
100.0
100.0
BEER IN ASIA-PACIFIC: Beer Asia-Pacific:
Distribution - Retail Distribution Patterns
"Other food stores" was the most important retail distribution format in Asia-Pacific,
accounting for nearly 35% of total volume sales of beer in 2007. This retail format
remained popular in less developed national markets such as China, Indonesia, Malaysia
and the Philippines. "Other food stores" tend to be traditional neighbourhood stores
which are valued for their convenient location and personalised service. In recent times,
however, these outlets have begun to face increasing competition from more modern retail
formats, principally supermarkets and hypermarkets. In Japan, the most recent development
in the retail sector saw the relaxation of the Large-Scale Retail Store Law, which
resulted in a drop in share held by local independent stores as large volume stores, such
as supermarkets and discount stores, increased in number.
The main trend across the region - not just in Japan - was the progress made by grocery
multiplies. Asian consumers increasingly prefer to do their shopping in these one-stop
retail outlets, which typically offer a wide variety of food and non-food items, as well
as a modern, air-conditioned shopping environment. Taking advantage of greater shelf
space, supermarkets/hypermarkets are able to conduct frequent sales promotions, reducing
prices on items, which results in them undercutting small businesses such as those
included in "other food stores", which do not enjoy the advantages of economies of scale.
In line with general levels of economic development, supermarkets have achieved greater
penetration of the retail sector in countries such as Hong Kong, Singapore, South Korea
and Taiwan.
Specialist outlets managed to take just over 17% of total retail volume sales at a
regional level in 2007. These outlets have not yet developed a significant presence in
national markets such as Hong Kong, Indonesia, Malaysia and South Korea. Beer in India is
sold only through specialist liquor stores, which have to obtain a license in order to
sell it. Given the restrictions on mass media advertising, distribution is of critical
importance if a brand is to be successful in India. There were an estimated 25,000
licensed specialist outlets selling alcoholic beverages in India in 2007.
The "others" category, which includes vending machines, street vendors and Internet
sales, took over 15% of total retail volume sales in 2007. Japan had the highest
proportion of sales through the "other" channel, reflecting the popularity of vending
machines in the country. Vending machines are located on most street corners, in hotels
and outside liquor stores. In recent years, growing public concern over the inability to
regulate sales to minors resulted in brewers voluntarily reassessing their reliance on
vending machines, which are expected to fall in number in short to middle term.
18
As retail formats evolved with the development of technology and penetration of the
Internet, sales of alcoholic drinks through the Internet grew in Singapore in 2007.
Leading supermarket chains such as Cold Storage offered the possibility of purchasing
through the Internet, although sales remained minimal in 2007. In the long-term on-line
sales of beers may increase, especially for leading brands, as affluent Singaporeans lead
increasingly busy lifestyles. Nevertheless, on-line sales are unlikely to threaten other
retail formats, due to a well-established preference for "physically" examining a product
prior to purchase.
Table 12 Retail Sales of Beer by Distribution Format and by Country: % Analysis 2007
% retail volume
China
Hong Kong
India
Indonesia
Japan
Malaysia
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam
Other AsiaPacific
TOTAL
SH
OF
SP
31.0
52.0
15.0
13.8
24.0
23.0
61.0
72.0
50.0
45.0
5.0
52.0
22.0
50.0
10.5
57.0
65.0
29.0
30.0
20.0
28.0
17.0
100.0
0.5
18.4
1.0
4.0
4.0
15.0
5.0
27.0
26.0
2.5
15.0
2.0
5.0
20.0
-
32.0
42.3
18.0
6.0
6.0
28.0
10.0
40.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
19.0
27.6
35.3
34.8
18.6
17.2
3.2
5.3
23.9
15.1
100.0
100.0
Source: Euromonitor
Key: SH = Supermarkets/hypermarkets
DI Others
TOTAL
OF = Other food outlets
In volume terms the beer market in Asia-Pacific is expected to grow slightly faster than
it did during the review period, with a CAGR of nearly 7% predicted over the 2007-2012
forecast period. All national markets will achieve positive value growth in real terms as
a direct result of national economies recovering across the region. Some national
markets, such as China, are predicted to come out of deflation during the early years of
the forecast period. The 2007 World Cup, jointly hosted by Japan and Korea, is expected
to boost consumption of beer, particularly in horeca channels across the region. Positive
performances from key national markets such as Japan, China and Thailand will be
instrumental in shaping regional forecast growth patterns. Increasing levels of
purchasing power coupled with further opening up of the beer market - including the
possible reduction in duty in many countries, notably China, Thailand and India should
serve to boost overall consumption of beer across the region as a whole.
China, the most populous country in the world, will unsurprisingly remain the most
important national market in volume terms throughout the forecast period, accounting for
over half of total volume sales by 2012. The Chinese beer market is expected to grow
substantially, with a CAGR of around 6% in volume terms and 5% in constant value terms
between 2007 and 2012. Growth will continue to be driven by consumer trends favouring
drinks with a lower alcohol content, a trend which was greatly encouraged by the
government during the review period. The opening up of the country's vast rural regions
will expand the potential consumer base for beer in the years to come. China's imminent
entry to the WTO will bring new opportunities to both domestic players and the leading
multinational breweries, although this will result in intensified competition. Beer
prices are expected to stabilise as a result. The potential reduction in import tax will
allow domestic players to upgrade their equipment (buying in from abroad), expanding
production and improving product quality.
In value terms, Japan will remain the most important national market, with sales
totalling over US$53 billion by 2012, over half of total value sales in the region. The
market in Japan, which is mature, will however see only incremental growth during the
forecast period. Price sensitivity will continue to influence beer purchasing patterns,
19
with happoshu lager showing healthy growth, though not quite to the same extent as
recorded during the review period. As the most influential country in terms of product
innovation in the region, Japanese brewers will help boost the penetration of new
products such as additive-free and all-malt beers, as well as low calorie lagers, to
other national markets across the region.
Thailand is expected to be the fastest growing beer market over the forecast period,
with a CAGR of around 19% in both volume and local currency constant value terms. As the
economy recovers and the beer market opens up further, demand for beer will be further
boosted. In a similar vein to what is expected to happen in China, a potential reduction
in import tax should help domestic players to compete and stimulate demand by improving
product quality. The promotion of tourism by the government and the continuing influx of
foreign brands are expected to underpin rising demand for premium products, particularly
through the horeca channel. Growth in India will be affected by factors similar to those
present in Thailand, but sales growth will also be underpinned by the changing lifestyles
of the more affluent sections of the country's middle class, where social drinking is
increasingly acceptable. Changes in legislation, such as the possible removal of
restrictions on the expansion of production capacity, will also help underpin an expected
rise in demand. In the longer term, a slow shift in social attitudes towards beer
drinking - from viewing it principally as an intoxicant to accepting it as an
accompaniment to food - will fuel growth.
Relatively developed national markets, such as South Korea, Singapore, Hong Kong and
Taiwan, will see moderate overall growth between 2007 and 2012. The maturity of the beer
market in these countries will be the major contributing factor to influencing levels of
growth. Competition in these countries will be focused on the premium end of the market,
as brewers concentrate on boosting value growth, mainly by intensive advertising and
promotion of more expensive premium brands.
Table 13 Forecast Sales of Beer by Country: 2007-2012
Forecast sales by volume and value
Million litres
China
Japan
Thailand
South Korea
Vietnam
India
Philippines
Taiwan
Hong Kong
Indonesia
Malaysia
Singapore
Other Asia-Pacific
TOTAL
US$ billion
Japan
China
South Korea
Thailand
Taiwan
Hong Kong
India
Vietnam
Malaysia
Singapore
Philippines
Indonesia
Other Asia-Pacific
TOTAL
2007
2008
2009
17,544
6,736.2
1,120.5
1,744.2
695.7
503.0
792.5
481.8
224.9
151.0
128.7
55.4
1,169.2
31,347
18,516
6,803.1
1,322.2
1,957.0
796.4
552.3
797.4
489.9
232.2
168.3
131.4
57.7
1,408.8
33,232
19,545
6,873.2
1,560.2
2,215.7
891.7
616.6
803.0
479.6
240.4
187.9
135.1
60.5
1,735.0
35,344
50.4
14.4
4.5
1.4
2.2
1.7
0.8
0.8
1.1
1.0
0.9
0.4
1.6
81.3
50.9
15.0
5.0
1.7
2.2
1.7
1.0
0.9
1.1
1.0
0.9
0.4
1.9
83.6
51.5
15.5
5.5
2.0
3.0
1.8
1.1
1.0
1.2
1.0
0.9
0.5
2.2
87.2
20
Million litres
China
Japan
Thailand
South Korea
Vietnam
India
Philippines
Taiwan
Hong Kong
Indonesia
Malaysia
Singapore
Other Asia-Pacific
TOTAL
US$ billion
Japan
China
South Korea
Thailand
Taiwan
Hong Kong
India
Vietnam
Malaysia
Singapore
Philippines
Indonesia
Other Asia-Pacific
TOTAL
2010
2011
2012
20,840
7,626.5
1,872.3
2,281.7
970.0
691.4
809.3
487.7
249.3
209.8
139.7
64.0
2,200.8
38,442
22,233
7,021.6
2,246.8
2,333.6
1,038.3
775.2
816.3
501.5
259.6
233.2
144.8
67.8
2,782.5
40,454
23,969
7,028.4
2,696.2
2,380.1
1,094.5
866.0
824.0
517.9
270.6
260.2
151.0
72.5
3,564.6
43,695
57.7
16.3
5.7
2.3
3.1
1.8
1.3
1.1
1.2
1.1
0.9
0.6
2.8
95.7
53.2
17.0
5.8
2.8
3.1
1.9
1.4
1.2
1.2
1.1
0.9
0.6
3.5
93.8
53.2
17.9
5.8
3.4
3.2
1.9
1.6
1.3
1.3
1.2
1.0
0.7
4.4
96.9
Source: Euromonitor
Table 14 Forecast Sales of Beer by Country: % Analysis 2007-2012
% analysis
% volume
China
Japan
Thailand
South Korea
Vietnam
India
Philippines
Taiwan
Hong Kong
Indonesia
Malaysia
Singapore
Other AsiaPacific
TOTAL
% value
Japan
China
South Korea
2007
2008
2009
2010
2011
2012
56.0
21.5
3.6
5.6
2.2
1.6
2.5
1.5
0.7
0.5
0.4
0.2
55.7
20.5
4.0
5.9
2.4
1.7
2.4
1.5
0.7
0.5
0.4
0.2
55.3
19.4
4.4
6.3
2.5
1.7
2.3
1.4
0.7
0.5
0.4
0.2
54.2
19.8
4.9
5.9
2.5
1.8
2.1
1.3
0.6
0.5
0.4
0.2
55.0
17.4
5.6
5.8
2.6
1.9
2.0
1.2
0.6
0.6
0.4
0.2
54.9
16.1
6.2
5.4
2.5
2.0
1.9
1.2
0.6
0.6
0.3
0.2
3.7
100.0
4.2
100.0
4.9
100.0
5.7
100.0
6.9
100.0
8.2
100.0
62.0
17.7
5.5
60.8
17.9
5.9
59.0
17.8
6.3
60.3
17.0
5.9
56.7
18.1
6.1
54.9
18.5
6.0
21
Thailand
Taiwan
Hong Kong
India
Vietnam
Malaysia
Singapore
Philippines
Indonesia
Other AsiaPacific
TOTAL
1.7
2.7
2.1
1.0
1.0
1.4
1.2
1.2
0.5
2.0
2.7
2.1
1.2
1.1
1.4
1.2
1.1
0.5
2.2
3.5
2.0
1.3
1.2
1.3
1.2
1.1
0.6
2.4
3.2
1.9
1.3
1.2
1.2
1.1
1.0
0.6
3.0
3.3
2.0
1.5
1.3
1.3
1.2
1.0
0.7
3.5
3.3
2.0
1.7
1.3
1.3
1.2
1.0
0.7
2.0
100.0
2.2
100.0
2.6
100.0
2.9
100.0
3.7
100.0
4.6
100.0
Source: Euromonitor
Table 15 Forecast Sales of Beer by Country: % Growth 2007/2012
% growth
% volume
Thailand
India
Indonesia
Vietnam
China
South Korea
Singapore
Hong Kong
Malaysia
Taiwan
Japan
Philippines
Other Asia-Pacific
TOTAL
% local currency
constant value
Thailand
India
Indonesia
Vietnam
Taiwan
South Korea
China
Singapore
Hong Kong
Malaysia
Japan
Philippines
2007/2012 CAGR
2007/2012 Total
19.2
11.5
11.5
9.5
6.4
6.4
5.5
3.8
3.3
1.5
0.9
0.8
25.0
6.9
140.6
72.2
72.3
57.3
36.6
36.5
30.9
20.3
17.4
7.5
4.3
4.0
204.9
39.4
19.2
14.5
11.7
9.4
7.6
5.4
4.5
3.7
2.7
2.6
1.1
0.3
140.6
96.8
73.7
56.4
44.4
30.2
24.5
19.9
14.5
13.7
5.5
1.7
Source: Euromonitor
Lager will remain by far the largest sector in both volume and value terms in all
national markets throughout the forecast period, with growth being underpinned by
substantial increases in the consumption of economy lager in national markets such as
China, Thailand and Taiwan. The expected strong performance of economy lager in China the region's key national market in volume terms - will drive regional sales of lager,
helping it to maintain its absolute dominance, with nearly 93% of total volume beer sales
by 2012. The lower levels of disposable income in real terms and economic disparities
between urban and rural areas in China will limit the scale of growth of both standard
and premium lager. Economy lagers will thus remain the dominant type. In value terms, the
22
standard lager subsector will see healthy growth, maintaining its importance in national
markets such as Hong Kong, Indonesia, India, Singapore and the Philippines.
Similar to the case in other regions where lager is dominant, dark beer is predicted to
be the fastest growing sector over the forecast period. Robust growth will come from a
very low consumer base, and increasing sales will mainly be the result of the wider
availability of dark beer through horeca channels. Despite predicted growth, sales of
dark beer will remain relatively insignificant at a regional level by 2012.
Stout will experience fairly modest growth over the forecast period, at nearly 4% in
volume and just under 2% in value terms. Positive growth will be registered in countries
such as China, Indonesia and South Korea, although again this will be from a very low
base. Stout will thus remain very much a niche product across the region.
Non-/low-alcohol beer will see sales follow a similar pattern to that recorded during
the review period, remaining relatively unpopular across the region. Aside from the fact
that Asian consumers have not yet developed an interest in such beer, a lack of product
availability and product promotion is the main contributing factor to the slow
development of the sector. Expected sluggish growth in Japan - the key national market in
the region for non-/low-alcohol beer - will negatively influence the sector's performance
at a regional level between 2007 and 2012.
Table 16 Forecast Sales of Beer by Sector 2007-2012
Forecast sales by sector, volume and value
Million litres
Lager
- Premium lager
- Standard lager
- Economy lager
Dark beer
Stout
Non-/low-alcohol
beer
TOTAL
US$ billion
Lager
- Premium lager
- Standard lager
- Economy lager
Dark beer
Stout
Non-/low-alcohol
beer
TOTAL
Million litres
Lager
- Premium lager
- Standard lager
- Economy lager
Dark beer
Stout
Non-/low-alcohol
beer
TOTAL
US$ billion
Lager
- Premium lager
- Standard lager
2007
2008
2009
2010
30,892
2,960.6
8,847.4
19,084
229.7
144.8
80.7
32,760
3,111.1
9,309.7
20,339
242.2
148.8
81.6
34,845
3,281.9
9,867.6
21,695
263.0
154.0
82.3
37,894
3,755.7
10,671
23,467
304.4
160.7
83.0
31,347
33,232
35,344
38,442
77.1
21.3
36.0
19.8
1.8
1.6
0.7
79.5
22.1
36.3
21.0
1.9
1.6
0.7
83.0
23.2
36.9
22.8
1.9
1.7
0.7
91.3
27.2
39.5
24.7
2.0
1.7
0.7
81.3
83.6
87.2
95.7
2011
2012
2007/04
CAGR %
39,862
3,574.2
11,087
25,201
341.7
167.1
83.7
43,046
3,750.9
11,902
27,393
390.0
174.6
84.3
6.9
4.8
6.1
7.5
11.2
3.8
0.9
40,454
43,695
6.9
89.3
25.2
38.4
92.2
25.8
39.1
3.6
3.9
1.6
23
- Economy lager
Dark beer
Stout
Non-/low-alcohol
beer
TOTAL
25.7
2.1
1.7
0.7
27.3
2.2
1.8
0.7
6.6
3.5
1.8
0.8
93.8
96.9
3.6
Source: Euromonitor
24