China’s Beer Output Rose Just 0.2% in the First Half

China’s beer production was nearly flat in the first half of the year, even as several domestic brewers pointed to stronger profits, a sign that the industry’s gains are coming more from price, product mix and operating efficiency than from making and selling much more beer.

China Economic Net reported that beer companies above the country’s official statistical threshold produced 19.362 million kiloliters in January through June, up just 0.2% from a year earlier. That is equal to 19.362 billion liters. Based on the rounded growth rate, the increase from the previous year was about 38,600 kiloliters, or 38.6 million liters.

The weak growth in physical output came as two local brewers projected much faster earnings gains for the same period. Yanjing Beer said it expected first-half net profit to rise 25%-35%. Pearl River Beer, also known as Zhujiang Beer, forecast a 5%-15% increase.

The contrast has drawn attention in a market where volume growth has become harder to find. China’s beer sector is mature, and competition is increasingly about taking share, raising average selling prices and moving consumers into more expensive products. In that setting, modest production growth does not necessarily mean weak financial results.

The shift has also highlighted the pressure on foreign brands in China. Budweiser Brewing Company APAC, the Hong Kong-listed regional arm of Anheuser-Busch InBev, said in early August that its sales volume in China fell 6% in the first half and revenue declined 6.4%. In the second quarter alone, its sales volume dropped 9.7% and revenue fell 8.6%.

Those results stood out because this summer’s World Cup in the United States, Canada and Mexico had been expected to support beer consumption during a key selling season. Budweiser has been a tournament sponsor for decades, and the event normally offers one of the strongest marketing platforms in the category.

But the boost appears to have been limited in China. The time difference pushed many matches into early morning hours in Beijing, weakening the usual connection between live sports viewing and late-night beer drinking in restaurants and street food venues. China Economic Net, citing sales data from Taobao’s instant retail platform, said orders linked to “beer and breakfast” rose 79.4% year over year in the morning, and women accounted for 51% of orders during peak viewing periods.

Industry participants cited by the outlet said the tournament helped some craft beer bars and other gathering places, but did not produce a broad surge across the market. The lack of a Chinese team in the competition and the weak performance of Asian teams were also described as factors limiting fan enthusiasm at home.

That matters because the shape of beer consumption in China has changed. For years, multinational and premium international brands benefited from high-end restaurants, bars and nightlife channels, especially in major cities. More recently, growth has shifted toward home consumption, mass-market dining and broader retail networks. Domestic brewers have generally been better positioned in those channels, especially outside the largest urban centers.

Analysts cited by China Economic Net said the current battle is less about expanding the total market than about redistributing market share. In their view, local brewers have strengthened their position by building national and regional distribution systems, improving brewing capacity and pushing premium products into price bands once dominated by foreign brands.

Yanjing Beer is one of the clearest examples. The company has relied heavily on U8, a premium product that has gained traction in the 8-to-10-yuan segment. In March, it introduced another higher-end product, A10, in the same price range. The strategy aims to repeat the success of U8 while broadening the company’s premium portfolio.

Yanjing also benefits from strong regional businesses that support that push. Brands such as Liquan and Xuelu remain profitable in markets including Guangxi and Inner Mongolia, according to the report. Those earnings give the company room to spend on expansion and marketing as it tries to grow beyond its traditional base.

Pearl River Beer is following a different path. Rather than pursuing an aggressive national rollout, it has focused on deepening its presence in southern China and improving its production footprint in Guangdong. China Economic Net said the company’s breweries in Meizhou and Zhongshan now have full brewing capabilities, reducing the need to move beer long distances for filling and sale. That can help protect quality, cut logistics complexity and support margins, especially in a market where volume growth is scarce.

Other major Chinese brewers are expected to offer a broader picture later this month. China Resources Beer is scheduled to report interim results on Aug. 19. Management previously said both average selling price and sales volume rose year over year in the first four months and that the company was targeting a 4%-5% increase in annual average selling price. Tsingtao Brewery is due to publish its half-year report on Aug. 27. In the first quarter, Tsingtao’s revenue slipped 1.54%, but net profit rose 5.23%.

If those companies also post earnings growth, it would add to the case that China’s brewers are managing to lift profitability in a largely stagnant volume environment. That would point to continued premiumization, better cost control and a more disciplined approach to channels and product mix.

The pressure on Budweiser APAC may intensify if those domestic trends continue. China Economic Net cited a recent note from China Merchants Securities saying higher aluminum prices could become more visible in the second half and into 2027, raising packaging costs. For a company already dealing with lower sales volumes and a weaker position in lower-tier cities, cost inflation would add another strain.

The broader market, however, may still get some support in the coming months. The summer selling season remains important, and some investors are watching weather patterns and a low comparison base from last year to see whether third-quarter volumes improve. Even so, the first-half data suggest that the most important story in China’s beer business is not expansion in output, but a change in who captures value from a market that is no longer growing much in physical terms.