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Beijing Olympics boosts Chinese beer sales

China’s best-known beer brand, Tsingtao Brewery Co Ltd, has announced a 42% lift in half-year profits, boosted by the publicity generated through its sponsorship of the 2008 Beijing Olympic Games.

The company, which is 27%-owned by US beer group Anheuser-Busch Cos Inc, said net income was 381.1 million Chinese Yuan (£29m), up from 268.7 million Chinese Yuan in 2007.

Despite the rise in profits, Tsingtao’s Hong Kong-listed shares lost more than 39% in the first half of the year, underperforming the 26% loss in the index of Chinese companies traded in Hong Kong.

The profit rise comes despite brewers worldwide struggling amid soaring raw material costs – in particular the price of barley, hops and packaging.

Tsingtao said it had been forced to increase the price of some of its brands during the period to cope with the rising costs, as well increasing labour rates.

China’s beer market is the world’s largest by volume, however it is a fragmented industry comprising almost 400 brewers and faces tough competition from Western beer companies.

Tsingtao is China’s second-largest brewer, following China Resources Snow Breweries, co-owned by London’s SABMiller and owner of China’s best-selling brand of beer, Snow.

In its attempt to weaken Snow’s dominance, Tsingtao has spent 1.6 bn Chinese Yuan on its Olympic campaign – a 20.5% increase in advertising budget compared with 2007.

written on 22.08.2008 um 03:43.

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