The tide of rising beer prices is spreading in many countries around the world. It is understood that, including China, Thailand, South Korea, Malaysia, the United Kingdom, Brazil and other multinational markets are ushering in a wave of beer price rise.
Raw materials, freight costs and tight global supply chains have become the main “drivers” behind the price rise. Some people in the beer industry told reporters that under the pressure of cost side, since last year, Chinese beer companies have successively raised prices, with a price increase range of about 10%.
However, according to the reporter of Securities Daily who visited the end consumer market, the market was not interested in the rise in beer prices. “The price of beer we sell here hasn’t increased.” Said a clerk at a convenience store in Beijing. “Beer has hardly gone up in price now.” Another person in charge of the beverage area of a large supermarket told the Securities Daily, “even if the manufacturer has raised the price, it really takes some time to reach the supermarket, at least half a year or more.”
“The price rise of beer itself lags behind. Secondly, for the price rise of beer in China, due to the lack of brand power and other factors, it is often an obvious rise and a hidden promotion, which leads to the excessive channel levels of Chinese beer brands and the solidification of consumer brand cognition, making the price rise cycle longer.” Cai Xuefei, general manager of Zhiqu consulting, told reporters.
global increase in beer prices
It is reported that China’s various types of alcoholic drinks will be fully raised in price next month. Baijiu has taken the lead in price increases, and then all kinds of colored wines and beer will rise in March. The main reason is that the prices of various consumer goods have risen, the costs of raw materials, packaging materials and logistics are also rising, while middlemen begin to hoard goods and manufacturers have no time to produce.
In South Korea, it is understood that with the rise in the price of Chinese beer in South Korea, the promotion activities of convenience stores with “10000 won for four cans of beer” began to disappear. Considering that the alcohol tax will be increased in April, the price of beer is expected to rise further. Ambev, a Brazilian beer giant with many brands such as skol and Brahma, recently announced that it had decided to raise the price of beer due to inflation, increased costs, exchange rates and taxes.
In addition, due to energy shortage, supply chain crisis and other factors, British brewers are facing the dilemma of rising costs, and the ex factory price of beer is about to rise.
The price rise of beer in China came earlier. Budweiser Asia Pacific said at the performance exchange meeting in the first quarter of 2021 that the price of its products has been raised according to the local inflation level since April, but the specific increase of different brands is different.
In September last year, the price of Wusu Beer outside Xinjiang increased by 6 yuan per box, with a price increase of about 10%. Then in November, Wusu Beer manufacturers raised the ex factory price again; On January 13 this year, Carlsberg (China) beer industry and Trade Co., Ltd. Xinjiang Branch issued a price adjustment letter and decided to increase the price of 12 cartons of 620ml red Wusu Beer products from February 1.
Cai Xuefei said: “in recent years, with the rise of commodity prices, the global beer price cycle has begun, and the price of Chinese liquor has also begun to upgrade. With the improvement of Chinese consumption quality, the price rising trend is obvious.”
Nevertheless, the price rise of beer has not appeared at the terminal. “From the perspective of supply and demand, the overall supply of the beer market exceeds demand. Even if many manufacturers have begun to raise prices, it may take a summer to pass the test to the terminal.” Xiao Zhuqing, chairman of Wuhan Jinkui Technology Co., Ltd., said, “at present, the inventory of beer in the channel is relatively large. Only when the channel side digests the inventory, starts to buy new goods and enjoy new prices, will consumers feel that the price of beer begins to rise at the terminal.”
high cost forces beer enterprises to raise prices
Words related to the cost side, such as rising raw material costs, cost reduction and efficiency increase, have been highlighted by many beer enterprises in the annual performance forecast or express in 2021.
Lanzhou Huanghe Enterprise Co.Ltd(000929) said in the performance forecast that in 2021, due to the fluctuation of commodity prices, the price of raw and auxiliary materials for beer production increased, resulting in the fluctuation of the company’s performance Guangzhou Zhujiang Brewery Co.Ltd(002461) said that in 2021, the company focused on medium and high-end transformation and innovation driven, and actively carried out cost reduction and efficiency improvement to deal with the impact of rising costs.
The cost of beer mainly includes raw materials such as barley and packaging materials such as glass and corrugated paper Chongqing Brewery Co.Ltd(600132) ‘s financial report data show that in the cost, the cost of raw materials accounts for 65% of the total cost, and the total cost of labor, manufacturing and other costs accounts for 35%.
Barley price is one of the important factors determining the cost of beer. It is understood that a ton of beer requires 100 kg-140 kg of barley, and barley prices have been rising since last year. In addition, under the fierce upward trend of paper price, the market price of corrugated paper remains high. According to the data of business agency, the price of corrugated base paper at the end of 2021 was 3324 yuan / ton, with an annual increase of 12.97%; As of March 2, the latest price of corrugated base paper was 3800 yuan / ton.
“China’s beer market will continue to enter the cycle of price adjustment. With the acceleration of the layout of beer enterprises in high-end, China’s beer industrial structure has been rapidly improved, and the ability to resist the rise of raw material prices has been further strengthened. However, considering that the epidemic continues, the price rise of China’s beer industry will continue.” Zhu danpeng, a researcher at China Brand Research Institute, told reporters.
Xiao Zhuqing believes that the price increase driven by the cost increase is a passive price increase, which makes little contribution to the profits of the enterprise. For beer enterprises, the active price increase should be to launch more new products with high added value.
