Stocks and spirits soar as football fans drink in World Cup of cheer

PUBLISHED : Saturday, 12 June, 2010, 12:00am
UPDATED : Saturday, 12 June, 2010, 12:00am

'Football without beer is like sashimi without soy sauce, or roast beef without Yorkshire pudding,' Peter Foster, a Beijing resident who is prepared to get up in the middle of the night to watch the World Cup, said.

Prospects of millions of beer- guzzling football fans congregating at bars around the country pushed brewery stocks higher yesterday, on the eve of the world's biggest sporting event.

The football extravaganza may come with a hangover for some. Beer is an indispensable elixir for football fanatics, but the fragmented nature of the Chinese brewery industry means gains may be limited.

Bar owners in Beijing fear that the event that will run until July 11 might not bring the promised boost to their business. Home-grown brands, like Yanjing beer, which are banking on the World Cup to lift sales, may also be disappointed as fans favour foreign brews.

Kingway Brewery surged 12.9 per cent to HK$1.75 in Hong Kong yesterday, while Beijing Enterprises, which operates the Yanjing brewery, rose 7.77 per cent to HK$47.15. The rally may be short-lived.

'There will be 50 per cent more customers during the World Cup, but they don't necessarily drink more,' the owner of a bar in Houhai, one of the prime nightlife precincts in Beijing, said. Beer sales could be higher but at the same time the cost of running a bar was mounting, he said.

Another bar owner, who runs a watering hole near the tourist- focused Drum Tower, said the World Cup would bring him no more than 10 per cent in additional customers.

China is the largest beer market in the world. Total beer consumption in the country was 42.19 billion litres last year, up 3.3 per cent from 2008, figures from consulting firm Access Asia show. However, the country's beer market remains as fragmented as the preferences of beer drinkers.

Bar owners in Houhai and Liangmaqiao, a key commercial area, said their customers mainly liked foreign brands such as Carlsberg, Heineken and Guinness. Local people who will watch the World Cup in open-air eateries meanwhile mostly drink Yanjing and Tsingtao beer.

'We don't sell too many local brands as the prices are too low,' a bar owner in Houhai said.

Gilbert Lee, a senior director at market research firm TNS Research International, said local brands not traditionally associated with football would find it harder to lift sales compared with global brands such as Budweiser, Heineken and Carlsberg.

'Local beer brands can leverage the World Cup season to boost their sales, but it will be difficult because they cannot run advertising or promotions in direct association with the World Cup [as they are not sponsors],' he said.

But China Resources Breweries said yesterday it would spend 80 million yuan (HK$91 million) on commercials during World Cup broadcasts by China Central Television.

Some global brands have gained a foothold in the growing Chinese beer market by partnering with local brands in order to access distribution networks.

South Africa's SABMiller has partnered with state-owned China Resources to operate the Snow brand, while Denmark's Carlsberg and Japan's Asahi are the strategic partners of the national brand Tsingtao. Belgium's Inbev, which had taken over the United States' Anheuser-Busch, owns the north-eastern Harbin brewery and other regional beer brands.

Whatever the concerns about beer sales, one thing is certain: It will be standing room only in bars around the country until the World Cup is over.

'Fans of football are tribal,' Tom Pattison, a football lover, said. 'Wherever the tribesmen are in the world, they seek out people from their tribe and together they unite over ceremonial offerings [beer] to support their tribal leaders in battle.'