E-Malt.com News article: China: Tsingtao, China Resources Beer shares jump on inaccurate report of beer prices hike

Shares in Tsingtao, China’s best-known brewer internationally, jumped on January 5 following a report that it would raise prices as much as 20 per cent, even though the company dismissed it as inaccurate, the Financial Times reported.

The share price rose to 23 per cent in Hong Kong on January 5 before paring gains and closing 11 per cent higher, adding $814 mln to the company’s market capitalisation.

The surge followed a report by Beijing News that Tsingtao and other breweries had raised prices on some products by 10 to 20 per cent due to higher raw material and labour costs.

Hong Kong-listed China Resources Beer, the parent company of China Resources Snow Breweries which is China’s largest brewer by volume, rose as much as 11.8 per cent to a record high following the report.

However, Tsingtao said in a statement to the Hong Kong exchange after market close that media reports of substantial price increases were “inaccurate”. The company added that prices of some of its products would rise due to an increase in packaging costs, but not by more than 5 per cent on average.

Chinese beer companies generally specialise in cheaper brews, which they sell in large volumes. This model has come under pressure as higher incomes prompt consumers to upgrade to higher-end brands, leading to gains for foreign beer manufacturers.

Japanese brewer Asahi last month agreed to sell most of its 18 per cent stake in Tsingtao to Chinese conglomerate Fosun and its subsidiaries for $844m. Tsingtao is China’s second largest brewer and was founded in 1903 by German and British merchants. It has the highest international presence of any Chinese beer brand.


04 January, 2018