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Analysis | Beer or baijiu? China’s drinkers become more quality conscious

Experts say the domestic beer market has dropped significantly by volume. But higher-quality brands and sales of traditional Chinese clear liquor, or baijiu, are bubbling away nicely

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Shares in Kweichow Moutai hit a new all-time high close of 556.49 yuan on Friday in Shanghai, pushing its yearly gains to 70 per cent. Photo: SCMP

Asahi Group, Japan’s largest beer producer, is considering bailing out of its share in Tsingtao, one of China’s largest beer makers, in another clear sign that Chinese drinkers are moving upmarket.

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Experts say the domestic beer market has dropped significantly by volume, as buyers opting to cut back on cheaper products. But higher-quality beer brands and sales of traditional Chinese clear liquor, or baijiu, are bubbling away nicely.

Total national beer production has seen three straight years of declines, before slightly rebounding 0.8 per cent in the first seven months of this year, according to recent data from the National Bureau of Statistics (NBS).

As those overall sales fall, however, demand for quality lager (imported and local), and traditional liquor such as Moutai, have continued strong.

A worker checks bottles of Tsingtao beer on the production line of Tsingtao plant in China's eastern port city of Qingdao, Shandong province. The company is shifting its emphasis towards selling premium versions of the product. Photo: Reuters
A worker checks bottles of Tsingtao beer on the production line of Tsingtao plant in China's eastern port city of Qingdao, Shandong province. The company is shifting its emphasis towards selling premium versions of the product. Photo: Reuters
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Kweichow Moutai, the country’s biggest premium baijiu producer, toasted first-half gross profit margins of 90 per cent giving it a market value of nearly 700 billion yuan (US$106.4 billion).

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