CR Beer’s first-half profit falls as rising prices of barley, hops eroded the margin of China’s biggest brewer even amid a searing summer
- CR Beer’s Net income fell by 11.4 per cent to 3.8 billion yuan (US$559.8 million) in the six months ended June, while revenue rose 7 per cent to 21 billion yuan
- The price of barley, a basic ingredient for brewing beer, jumped by 13.8 per cent in the first four months of the year, according to the latest report by Huajin Securities
China Resources Beer Holdings (CR Beer) reported its first decline in interim profit in almost three years, as the rising prices of hops and malt added to what the chief executive of the nation’s biggest brewer called the “triple whammy” of challenges during the first half.
“It was a remarkable first-half, as we face the triple whammy of a [slowing] economy, the uncertainties of the Covid-19 outbreak, and increasing costs” in the prices of hops, barley and other agricultural ingredients for brewing beer, said CR Beer’s chief executive Hou Xiaohai, during a briefing in Hong Kong.
Still, the prospects of a company with 34 per cent of China’s beer market, appear rosy in the second half, as an unusually hot summer is expected to spur sales of its portfolio of beers. The combined sales volume of CR Beer’s Snow brand – as well as Heineken, Tiger, Sol and other brands bottled under license – dipped by 0.7 per cent to 6.3 kilolitres in the first six months, even amid a resurgent Covid-19 outbreak.
The price of barley, a basic ingredient for brewing beer, jumped by 13.8 per cent in the first four months of the year, according to the latest report by Huajin Securities.