Abstract
Although China has a long history of alcohol production and consumption, only recently has China’s alcohol industry become an important international player. This is particularly true with regard to beer. China’s beer market has grown fast. After years of watching mass-produced light lagers saturate China’s market, craft brewers have begun catering to more sophisticated consumers. However, there are important challenges for craft beers in China. Government regulations, market competitions, and quality supply chains are all essential for China’s craft brewing movement. The goal of this chapter is to shed some light on China’s recent craft beer market development.
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Note Market value is calculated based on retail selling price (RSP) with year-to-year exchange rate. Data Source Euromonitor 2014
Data Source Euromonitor 2014
Note The number of craft breweries is collected from RateBeer. It includes brewpubs and microbreweries. Online retrieved from http://www.ratebeer.com/breweries/china/0/45/
Data Source China National Bureau of Statistics 2015
Source Data on total beer consumption collected from Euromonitor 2014. Data on imported beer collected from UNcommtrade, retrieved from http://comtrade.un.org/data/
Note The statistics do not distinguish between cafés and beer bars. Often an outlet serves coffee, beer, and many other alcoholic or non-alcoholic drinks. Data Source Euromonitor 2014
Note The disposable income is calculated in Chinese Yuan per capita per year. Data Source Chinese National Bureau of Statistics, 2016
Data Source China National Bureau of Statistics, retrieved from http://data.stats.gov.cn/workspace/index?m=hgnd
Source Data on imported beer collected from UNcommtrade, retrieved from http://comtrade.un.org/data/
Note Western Europe includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy , the Netherlands, Norway, Portugal, Spain , Sweden, Switzerland, Turkey, and the UK. Data Source Euromonitor 2014
Notes
- 1.
- 2.
Before China joined the WTO, its domestic trade polices created a beer market in a highly fragmented manner. With support from local (and regional) government there were almost 1000 regional middle-sized brewers all around China brewing (local) beers. It was reported that almost every city in China had its own branded local beers, while beer from other regions or provinces was often imported with high taxes. Government market protection and direct investment, accompanied by the country’s increasing purchasing power, led to a booming growth of middle-sized brewers during the 1990s (Gilley 2001).
- 3.
Throughout the chapter the term craft brewery (or microbrewery) is defined as a small-scale beer producer which strictly follows the traditional European brewing methods. Its products are generally labeled craft beer.
- 4.
The national prohibition on traditional beer from January 1920 until April 1933 in the USA had washed away the nation’s ability to discriminate over low-quality beer, which directly affected the later beer industry’s marketing strategy and its product attributes (Schwartz and Laufer 1947). The inferior standard taste of mass-produced beer prevailed in the US beer market due to the Prohibition policy and fierce competition among mass producers.
- 5.
By using the highest share in total alcohol consumption, Poelmans and Swinnen (2011) define countries such as Germany, Belgium, the Czech Republic, UK and USA the traditional beer drinking nation. Colen and Swinnen (2016) provide a detailed illustration about how China’s beer market developed with its economic growth.
- 6.
This is mainly due to China’s incomplete regulations and laws on the micro-level beer industry. Under the present laws, there is no official title of craft breweries; see later in this chapter.
- 7.
The percentage of craft beers in total beer exports from the USA to China increased significantly over the last five years (USDA 2010).
- 8.
Taobao is an online marketplace/shopping platform not unlike Amazon or eBay. A search that we conducted while writing this chapter revealed more than 1000 sellers providing equipment that can be used for brewing beer. You can visit the website here: http://www.taobao.com/market/global/index_new.php.
- 9.
Indeed, no craft beers have been found to be associated with any food safety issues so far.
- 10.
The regulations in the Food Safety National Standards—Fermented Alcoholic Beverages and Their Integrated Alcoholic Beverages (GB 2758–2012) and National Standards—Beer (GB 4927–1008) states that the amount of yeasts and microbiological bacteria varied over different countries. In fact, studies show that a low amount of microbiological bacteria did not pose any harm to health (Bokulich and Bamforth 2013), and some might bring health benefits (Blaszczak-Boxe 2014). However, due to their inability to distinguish the differences in these microbiological bacteria, Chinese officials by default implement much stricter standards, which completely ignore the role of craft breweries, since the market is still dominated by the mass producers.
- 11.
The main difference in opening a craft brewery and serving at a restaurant is that breweries do not need to comply with AQSIQ’s Food Safety National Standards with regard to beer. Since beer is served on-site, no commercial distribution or retailing is involved.
- 12.
In 2008 a serious milk powder contamination (melamine contamination) scandal caused an emergency review of China’s food safety regulations. The central government has taken a series of actions to reduce the damage of this scandal on public trust, and its subsequent reform of food safety law imposed much stricter regulations on almost all of the food industry (Pei et al. 2011).
- 13.
The Beijing Homebrewery Society (BHS) is a non-profit organization established in 2012. It was founded by several local craft breweries. The aim of this brewing society is to advocate the culture of craft brewing, and to share the experience of brewing beer among small to medium-sized craft brewers. It currently has about 14 members. Detailed information can be found at: http://www.beijingbrewing.com/.
- 14.
Hop production is mainly concentrated in northwestern China. Province like Ningxia, Gansu, and Xinjiang are the main hop production areas; however, the agricultural infrastructure in these areas is under-developed because they are not large producers of staple grains like rice and wheat.
- 15.
The low-alpha hop is a kind of hop which contains the most important compound (alpha acids). Basically, it is responsible for the bitter taste of beer during the brewing process (De Keukeleire 2000).
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Li, F., Shi, Y., Boswell, M., Rozelle, S. (2018). Craft Beer in China. In: Garavaglia, C., Swinnen, J. (eds) Economic Perspectives on Craft Beer. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-58235-1_17
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