Tsingtao hikes profits after cost cuts
Tsingtao Brewery, the country’s number two brewer, on 27 March 2018 posted a 21 percent jump in annual profits, short of forecasts but still the firm’s fastest profit growth since 2010 after it had reined in costs.
The brewer said its 2017 net profit jumped to 1.26 billion yuan (USD 201 million). Its turnover rose only 0.65 percent to 26.28 billion yuan (USD 4.3 billion).
China is the world’s largest beer market by sales, but volumes have been slipping and profit margins are thin because of fierce competition between local and international brewers.
Brewers are increasingly looking to push premium and craft beers that are more popular among China’s younger urban middle-class drinkers.
Tsingtao and CR Beer both raised prices of some products at the start of the year in response to higher packaging, raw material and labour costs.
Local conglomerate Fosun International took a stake in Tsingtao in December 2017 after Japan’s Asahi said it would sell off its entire 19.9 percent stake in Tsingtao for over USD 900 million.
