Tsingtao Brewery Essay

1208 Words Oct 16th, 2015 5 Pages
1. Company Introduction - TSINGTAO Brewery Co., LTD

History. Tsingtao Beer, one of the oldest brewery brands in China, can trace its colonial roots back to 1903, when German forces occupied Qingdao (Coastal city located in Shandong province in China). Beer businessmen from Germany and British founded the Tsingtao brewery factory in Qingdao and started to brew in the European way. Since Japan seized China from Germany during the First World War Japanese took the control of Tsingtao from Germans and run the company in effect until 1945. As the People’s Republic of China was established in 1949, Tsingtao became state-owned enterprise. It was privatized in 1990s with the formation of Tsingtao Brewery Company Ltd. and then issued H-shares
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2. Background of Beer Industry in China

Growth of beer market. The global beer consumption in 2011 was 181.6 billion liters and the consumption of China which is about 27% by 49 billion liters. In 2002, China overtook the USA to become the leading beer market in terms of volume sales. Since that time, China has been the biggest beer market in the world by volume for the 10th consecutive years. Chinese beer market has grown since 2000, at a CAGR of 44.4%. It is about three times the world beer market’s CAGR, which is 2.6%. This is due to the huge Chinese drinking population, which is 800 million people of a total 1.2 billion population. (Please see the appendix 3, “China beer consumption”)

Change of consumer behaviors. China’s unprecedented economic growth has led to increased disposable income, which has caused a rise in consumption and changes in eating and drinking habits. Chinese beer has seen a growth in popularity internationally in the past few decades. The rise of China’s middle class and increases in discretionary income have allowed many consumers to afford foreign-made and foreign-branded alcoholic beverages.
The growing health craze is also influencing the development of beer industry. Low-alcohol beers will continue develop in China while Chinese consumers’ habits and acceptance of the new-flavored and healthy beers develop. There remains strong potential for developing volume per

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