Blog: Heineken fighting to break China
Olly Wehring | 6 September 2006
Strong performances in most of the world’s emerging beer markets led to a set of healthy first-half results at Heineken today (6 September).
Nevertheless, it was interesting to note the comments of Heineken CEO Jean-Francois van Boxmeer on China, a key emerging beer market but also the world’s largest by volume.
Heineken, he said, was close to breaking even in China after over a decade in the country but he insisted it remained a “very tough market”. Multinational brewers have faced difficulties in distributing beer across the country while the very low price of beer makes it a challenge to generate rising profits.
“If you see the selling prices there, and I’m talking about your bread and butter local Chinese brands, then pricing is very low at around EUR22 (US$28.13) a hectolitre. It’s extremely difficult to earn a lot of money,” van Boxmeer said.
“It’s a very tough market structurally. We don’t have a pessimistic view on China but we don’t see going forward anything that will make that situation structurally change. There is chronic over-capacity in the market of around 30%.”
Nevertheless, SABMiller’s Chinese venture said today that its earnings during the first-half had risen 26% to HK$75m (US9.6m) as sales of its national brand, Snow, soared 85%. The venture seems to be succeeding in pushing Snow as a national brand and is fighting it out with Tsingtao for top spot in China.
Heineken, alongside Asian partner Fraser & Neave, has spent much of this year expanding its presence on the continent outside of China, with deals to strengthen their foothold in India, Laos and Vietnam.
It’s vital for Heineken that it doesn’t take its eye of the ball in China and allow its fierce global rivals to grow too strongly in such a key market for future growth in the beer industry.
Philadelphia’s soda tax came into force on Sunday, and is reportedly causing a stir in the city's check-out aisles....
Earlier this month, I was most-kindly invited by Accolade Wines to visit the Royal Albert Hall in London. The reason? They wanted to see a tennis great in action, and then give them a guided tour thro...
Do you like whisk(e)y? And, I mean, really like whisk(e)y? Are you at a loose end in the first half of 2017? If so, then I've found just the job for you....
Most of the time, changes at the top of a company present themselves in press releases, stock exchange filings or responses from a spokesperson....
- Chile's winemakers caught out by Brexit "disease"
- What's coming up in beer in 2017? - Comment
- Interview - Pernod Ricard's luxury director
- The just-drinks Analyst - 2017 forecasts
- What's coming up in wine in 2017? - Comment
- Suntory sends staff to fat camp - report
- Diageo Australia names new commercial head
- Pernod Ricard's Absolut Lime - NPD
- Former Stoli Group CEO joins Perfect Vodka owner
- US craft beer growth slows again - IRI figures
- Global vodka insights - market forecasts, product innovation and consumer trends
- The Next Seven Big Beverage Markets
- Global Cognac insights - market forecasts, product innovation and consumer trends
- Global gin insights - market forecasts, product innovation and consumer trends
- Darker Than Before: Global Prospects for Brown Spirits