(Yicai) Nov. 3 -- China’s beer sector logged a slowdown in growth in the three months ended Sept. 30 after a strong start to the year, but there is no cause for alarm as premium beers, which have a higher profit margin, are becoming more popular, industry insiders said.

Budweiser Brewing Company APAC, Asia’s biggest brewer by sales, posted a 5.7 percent increase in sales in the Chinese market in the first nine months from a year ago, much slower than the 9.4 percent clip in the first half, the Hong Kong-based firm said in its latest earnings report. But revenue from its high-end and ultra-high-end lagers expanded by double digits in the first three quarters, it said.

Likewise, Tsingtao Brewery’s sales of its signature Tsingtao beer slumped 5.5 percent in the third quarter from a year ago to 1.3 million tons, according to its most recent financial report. But sales of its medium-range to high-end lagers climbed 3.3 percent to 927,000 tons, it added. Yanjing Beer also reported a similar trend.

As beer drinkers opt for more premium lagers, industry insiders are upbeat about the market’s prospects and Chinese breweries will likely go more high-end, He Yong, secretary-general of the China Alcoholic Drinks Association, said yesterday. China’s premium beer market is becoming more diverse and its customer base more segmented, he added.

China Resources Beer, which makes the popular ‘Snow’ lager, has handed the task of making premium beers to Heineken China, which it acquired in 2018, Chairman Hou Xiaohai said. The firm hopes Heineken China’s sales will exceed 1 million kiloliters between next year and 2028 and maybe even reach 1.2 million kiloliters.

Chinese beer brands need time to build up a reputation on the world stage, so by leveraging the popularity of Heineken to promote its high-end ales, CR Beer will not only seize market share in southeastern Fujian province, which is Budweiser’s main market, but also achieve growth in other areas, beer expert Fang Gang told Yicai.

Craft beer, whose sales started to boom during the Covid-19 pandemic, is entering the premium market. China now has around 400 to 500 craft breweries, although this is still a fraction of the 12,000 to 15,000 breweries of regular beer, according to statistics from the China Alcoholic Drinks Association.

Editors: Tang Shihua, Kim Taylor