China: Major brewers are pouring a new pint of beer in China these days-premium draft, Asahi Breweries said on January 31. Japanese beer makers flooded into the Chinese market in the mid-1990s, but concentrated on lower-priced lagers to compete with local rivals. But declining sales at home have led the companies to seek a boost in sales through increased brand recognition in China, which is tipped to soon surpass the United States as the world's largest beer market.

Last July, Suntory Ltd. became the first brewer in Shanghai to introduce draft beer. Suntory started operations in Shanghai in 1996, focusing on products priced from 3 to 5 yuan. A Suntory official said it is time to sell premium beers with high added value in China as the Chinese are now familiar with Japanese beers.

At 5 yuan (about 75 yen) or more per 640-milliliter bottle, the beer is two to three times more expensive than local offerings. Draft beer is still rare in China, but where it is offered the beer has caught on and sales have been brisk, especially at upscale restaurants and bars. Most local brews retail for 2 yuan or less. Other brewers plan to do the same.
Asahi Breweries Ltd. is scheduled to start production of Super Dry draft beer this spring at a plant currently under construction in Beijing. Asahi Breweries is to increase its annual capacity in China, according to reports. Nikkei Report claimed on January 31 that the Japanese brewer is looking to boost capacity at its beer sales and production joint venture in China’s Zhejiang Province by about 30%, at a cost of 1.4 billion yen (US$13.2m). The company intends to build new fermentation, bottling and other facilities on the premises of its existing plant in the province, where capacity currently stands at 150,000 thousand litres per year.

Kirin Brewery Co. plans to market draft beer in China this summer.

Boosted by rapid economic growth, China's beer market doubled during the past decade. Some 23.49 million kiloliters of beer was consumed in China in 2002, more than three times that consumed in Japan, according to Kirin Brewery. The United States, which consumed 23.82 million kiloliters, is almost certain to have been surpassed by China in 2003 as the largest beer-consuming nation in the world. China became the top producer of beer in 2002.

Japanese brewers began business in China by purchasing local makers, and have expanded sales networks through tie-ups with popular regional brands. They have tried to differentiate themselves from the roughly 400 beer makers operating in China by selling more expensive beers. But competition is tough as consumer tastes vary throughout the massive country and local brewers hold combined shares of up to 90 % of the market.

04 February, 2004