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China's two biggest brewers have posted first-half sales rises as consumers increasingly move to premium beers, according to a media report.

CR Beer is the owner of the Snow brand, the worlds biggest beer by volume

CR Beer is the owner of the Snow brand, the world's biggest beer by volume

Sales for China's leading brewer by volume, China Resources Beer, were up 11% in the first six months of the year to CNY17.5bn (US$2.56bn), Nikkei Asian Review said today. The Snow owner's growth came despite volumes falls as more expensive products drove performance.

Meanwhile, Tsingtao Brewery, China's second-largest brewer, posted a smaller 1% rise to CNY15.1bn, but the increase follows difficult times for the company in which Japan's Asahi sold its 20% stake in the company. According to Nikkei, increased costs for Tsingtao were outpaced by sales of higher-margin beers.

China's beer market has seen volumes decline for the past four years straight, Nikkei said. However, brewers such as Anheuser-Busch InBev have improved margins and found growth by concentrating on more expensive brands such as Budweiser and Corona. CR Beer this month signed a licensing deal with Heineken to gain control of its namesake lager in China. The brand has a small footprint in China but sells for a higher price that Budweiser.

Despite the growth at the top end of the market, an analyst this month warned that an influx of beers into the super-premium category will intensify competition. A number of international brewers including Spain's Grupo Damm, are entering the Chinese beer market to target high-end consumers.

Is Heineken risking too much to chase Anheuser-Busch InBev in China? - Click here for a just-drinks comment


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