AB-InBev signs distribution deal with Diageo for Guinness

Diageo, the world’s major drinks company and brewer of Guinness, has appointed AB-InBev to become the exclusive distributor in the Chinese mainland of Guinness, eyeing fast expansion of sales in the market, media reported on 28 August 2017.

The distribution contract will run for five years, subject to performance criteria, and will cover both the on- and off-premise channels in the mainland.

The two parties expect sales volume will double from the current 10,000 hl within one year.

For Diageo, the strategic alliance with AB-InBev will help Guinness take advantage of the brewer’s strong presence in the beer market, while Diageo has an advantage in spirit production and distribution in China.

The two did not disclose the expected growth target for the five-year term.

According to data by the National Bureau of Statistics, China’s beer output in the first half of 2017 was about 227 million hl, an increase of 0.8 percent year-on-year. After several years of beer production going down, this is taken as a sign that the decline has bottomed out, thanks to consumers trading up to higher-priced beer brands.

As more consumers are getting increasingly savvy, it is believed that the Chinese market will also embrace wider varieties of alcoholic drinks, be they ales, lagers, stouts or ciders.