Chinese Beer Drinkers Push Carlsberg Forward

The Danish brewer Carlsberg Group, one of the world’s premium beer makers, plans to double its global profits by 2015 in part with its expansion in the Chinese market, senior company officials said.

The brewing company registered profits of $1 billion in 2010, and increase of 49 percent year-on-year.

To cater to the increasingly expanding Chinese market, it recently introduced the Carlsberg Light brand in the Chinese market, part of its repositioning plan announced in April.

“The launch of Carlsberg Light is an important part of our new global market strategy, and it heralded our expansion in China’s food and beverage market,” said Stephen Maher, chief executive officer of Carlsberg China.

In line with its repositioning strategy, the Danish brewer will roll out its new packaging across more than 140 markets worldwide.
Its new strategy in China has been spurred by the steady growth of the beer industry in the country in recent years.

China’s beer production rose by 6.28 percent year-on-year in 2010 to reach 45 million kiloliters thanks to the robust economic growth and the increasing popularity of beer in the world’s most populous nation, according to the China Alcoholic Drinks Industry Association (CADIA).

However, beer consumption stands at only 33 liters a person annually, far from that of the United States and Europe, which points to the great potential of the already big market, analysts said.

CADIA data show that China’s beer industry has recorded profit growth of up to 494 percent in the past five years, and the burgeoning market is attracting investment from foreign brewers.

Carlsberg bought a 12.25 percent stake of Chongqing Brewery Co in November for 2.39 billion yuan ($369 million), making it the leading shareholder of the domestic brand with 29.71 percent shares.

The booming market has also benefited domestic players. The gross profit rate of eight listed brewing companies in China is expected to reach 40 percent this year, and the sales revenue to increase 30 percent year-on-year, according to an industry report released in March by AJ Securities Co Ltd.

The Shanghai-listed Tsingtao Brewery Co, one of China’s leading breweries, announced profit of 1.52 billion yuan in 2010, up 21.6 percent year-on-year. Its revenue increased by 26.7 percent year-on-year to 5.25 billion yuan in the first quarter of this year.

Sales of another major brand, Yanjing Beer Group Corp, reached 5.03 million kiloliters in 2010, up 7.71 percent year-on-year, and it expected another increase of more than 10 percent this year in terms of sales.

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