Two big beer makers start hard-fought war in Beijing
A battle brewed between China's two largest beer-makers Tsingtao and
Yanjing. Tsingtao has announced that it is going to start marketing its low-end
beer in Beijing, the home of Yanjing, Wednesday's China Daily reported.
low-end product of Tsingtao, which is known as Tsingtao Premium-quality Beer,
will be available in Beijing in days, according to Sui Zhanping, general manager
of Tsingtao Beer's north department.
Sui says it is a strategic move for
Tsingtao, the country's biggest brewer, as it launched all lines of its products
on the Beijing market, the base of the country's second largest brewer, Yanjing
Before the move, only the high-end Tsingtao beer was available in
Beijing, on average priced at more than 10 yuan (US$1.20).
Beijing market is mostly controlled by Yanjing Beer, which has about 90 percent
of the market and prices its low-end product even below 2 yuan (24 US cents).
Beijing consumes 600,000 to 650,000 tons of low-end beer annually.
high-end market, smaller than the low-end in Beijing, is shared by Yanjing,
Tsingtao, Budweiser and Corona.
Sui expected Tsingtao Beer may capture about
20 percent of the low-end market by 2008.
He said he believed Beijing
consumers would like to have more choices.
Moreover, Sui said that rather
than selling through other distributing companies, Tsingtao has set up its own
delivery team in Beijing.
The team will deliver Tsingtao beer directly to
restaurants and retail stores.
A Yanjing spokesman refused to comment on the
An official from the China Brewery Industry Association said
it is hard to estimate the battle result.
"Yanjing is very strong in the
North China market, especially in Beijing," the official was quoted as
The country's third largest beer maker China Resources has moved its
marketing department for Snow Beer to Beijing. The Japanese Asahi breweries has
also launched its low-end Beijing Beer on the market.
Tsingtao acquired two
Beijing beer plants in 2000 and 2001. But it spent more than three years
upgrading their technology.
The battle in the Beijing market will be decisive
for the future development of the two beer giants, the official
According to Tsingtao's financial report, its production volume reached
3.13 million tons in the first three quarters last year, up 14 percent
year-on-year. Sales income totaled 7.1 billion yuan (US$858 million) in the same
period, up 14 percent.
The production volume of Yanjing amounted to 2.18
million tons in the first three quarters, rising nearly 29 percent. Its sales
income totaled 3.85 billion yuan (US$465 million).