This week Beijing-based Yanjing Brewery said it is on track to deliver volume growth of 18% for 2013 in Yunnan after its volume soared almost 60% to 1.7m hectolitre (hl) last year.
Likewise, local authorities said this week that Yunnan-based beer group Lancang River has experienced volume growth of 28% in Q1 2013 at its biggest brewery in Chuxiong, while revenue from it beer sales rose an impressive 53% over the same period last year.
When Copenhagen-listed brewer Carlsberg entered Yunnan in 2003 with the acquisition of two local brewery groups, Dali Brewery and Kunming Huashi Brewery, it said the two groups accounted for more than 50% of the total beer market in Yunnan, which at the time probably only was around 2m hl.
Fast forward to 2013 and Yunnan’s total beer market is estimated to easily surpass 10m hl, with new entrants clamoring to enter the growth market, while existing breweries ramp-up production.
Carlsberg loses ground in Yunnan
However, Carlsberg has, according to Aktiefokus’ information, only lifted its production capacity to 3,8m hl in the province and given the unlikelihood that its two breweries are running near full capacity, its percentage market share is estimated to be somewhere in the low 30s in 2013.
Thus it has lost plenty of ground during the last decade.
Last year Carlsberg which sees Asia, and especially China, as its biggest growth market, announced its intention to construct a greenfield brewery in Dali, Yunnan, which by 2025 is expected to reach a yearly production capacity of 10m hl and replace the existing Dali Brewery it acquired in 2003.
Carlsberg’s challenge is that the new brewery is far from ready and its competitors have all announced similar plans. The world’s largest brewery AB-InBev was surrounded by heavy rumors last year saying that it also was to construct a 10m hl per year greenfield brewery in Dongchuan, situated 50 km north of Yunnan’s provincial capital, Kunming.
Henan-based Jinxing Brewery Group is also expected to commence its new 3m hl per year brewery before the end of this year, and thus spelling more competition for Carlsberg’s ambition to rule the south-western province.
Jacob de Lichtenberg is head of Aktiefokus China. Aktiefokus is a supplier of market and financial information for the professional segment. Aktiefokus is headquartered in Copenhagen, Denmark, but also has a branch office in Chongqing, China. Customers include Danish and Europeans bank analysts and major Danish financial newspapers.