China resources, heineken marriage behind: domestic beer industry production decline for many years

On the morning of August 3rd, huarun beer (00291, HK) cooperation between heineken are disclosed. Specific cooperation include, huarun beer (beer) controlling shareholder China resources group co., LTD. (hereinafter referred to as huarun beer group) intends to sell a 40% stake to heineken, price of hk $24.35 billion. China resources and huarun beer group's shareholders plans for a total of 460 million euros in cash for the price to buy 0.9% of heineken. In addition, huarun beer will combine the heineken China business.

Marriage of two beer giants, no doubt, will further affect the industry pattern, pattern of domestic beer industry in the future will be how? In addition, the two giants cooperation is behind the Chinese beer industry production decline in industry for many years the status quo, the future trend of the beer industry?

Production is still in the downward trend

Hong Kong huarun beer, snow beer brand. Huarun beer group holds 51.67% stake in listed company.

"Heineken brand is very loud, but it's lack of channels and the ability to fall to the ground in China, and in this respect, China resources just can be complementary. The combination of the two means of Chinese beer in the high-end market will be formed into a pattern of "three pillars"." China's food industry analysts by peng to the "daily economic news" reporter said, "three pillar" is the CRC, anheuser-busch inbev and carlsberg.

In by peng view: "because China resources, anheuser-busch inbev and carlsberg these three giants will open in the high-end market, accelerate the market layout, further squeeze the market space."

According to wide hair negotiable securities, according to data from the development research center, China resources in 2017, Qingdao beer in the mid-range wine form a pattern of duopoly, the market share accounted for about 20% and 30% respectively; Budweiser is dominance in the high-end wine market, the market share of about 40%.

In fact, in recent years, the concentration degree of the beer industry in China has been rising. Forward-looking industry research institute of the Chinese beer industry brand competition in 2018-2023 investment and consumption demand forecast analysis report, according to data from 2015 domestic beer industry CR5 (top five beer manufacturers to occupy market share) of less than 50%, industry CR5 growth in 2016 was 74.7%. And by the end of 2017, the top five domestic beer industry of China resources snow respectively (27.8%), Qingdao beer (20.0%), anheuser-busch inbev (16.7%), yanjing beer (12.0%), carlsberg (5.7%), CR5 is 82.2%.

Even so, China's beer industry concentration compared with other countries more mature beer market is still not high, the industry leader has not yet appeared. Wide hair negotiable securities research report pointed out that in the next 10 years China's beer industry is expected to form a pattern of duopoly. More than 70% of the province of the competitive landscape, competition has eased, the superiority of main item have begun to improve market share, the disadvantage of market strategy.

In their industry leading, but the beer industry in our country in recent years, both production as a whole is still in the slow decline.

Wide hair negotiable securities analysis and prediction of a research report, in the next 10 years in our country beer industry sales annual compound growth rate of 1%. And according to the UN, China from 2015 to 2030 beer consumption main groups (25 ~ 44) proportion will continue to decline, the average fell 0.35%, and improve future health demands, slow population growth, in the long run, China's beer consumption will decline, but relatively slow decline.

China's beer industry production is declining in 2013 years. Figures show that 2008 years ago, China's beer industry can keep nearly 10% growth overall, from 2009 to 2013, the overall remains of 5% ~ 10%; In 2013, the high yield 50.615 million litres of beer market in China history.

From 2014 to 2017, our country beer overall market weakness, production is declining, for four consecutive years in 2016 to 45.06 million litres. To 2017, the production of beer is only 44.02 million litres.

1 ~ 2, 2018, march, April, may, domestic beer production year-on-year growth of 0.7%, 2.5%, 0.7% and 2.5% respectively. The beer production fell 2.3% in June.

Is impacted by the imported beer and alternatives

In explaining why beer off sales fell in June this year, by peng said that domestic beer production decline is associated with the World Cup in June. In fact, during the World Cup, beer consumption growth is achieved, but head is mainly imported beer, domestic beer does not enjoy the dividend.

The impact of imported beer is currently one of the beer industry in China are faced with the problem. Domestic beer production decline at the same time, imported beer is five consecutive years of strong growth. Data show that in 2017 China's imports reached 716200 litres of beer historic highs, rose 83.9% year-on-year in January, 2018, China imported beer.

On the other hand, with the improvement of consumer health consciousness and the consumption structure to improve, the traditional beer gradually lost its appeal to consumers.

By peng believes that appear constantly low alcohol as a substitute to beer, also had a certain impact on beer industry.

By peng to the "daily economic news" reporter said: "for the whole beer industry there are mainly two aspects, one is low this no profit, the second is high-end this sales." But he said the development of China's high-end beer at the same time, he thought, as the imported beer on consumer education, popular science, in the past two years China's high-end beer consumption population dividend than before has been improved greatly. At present, the high-end beer from its early into the growth period, temporarily not more than 20% market share, but is expected to reach 35% in the next three years.

Wide hair negotiable securities also wrote, due to the increase of space is limited, the main driver of growth in the future will be done by tons of beer industry price increase. This year, the beer industry companies on the product price increases.