Budweiser APAC takes a hit in China as biggest Lunar New Year campaign runs into coronavirus outbreak
- Sales to nightclubs and restaurants has come to a halt amid the public health crisis sparked by coronavirus outbreak
- Net profit fell 2 per cent in 2019, partially due to weaker sales to nightclubs and restaurants last quarter
Budweiser Brewing Company APAC, the most profitable brewer in Asia, said revenue and profit in China plunged in the first two months of this year as nightclubs and restaurants were shut across the country amid the coronavirus outbreak.
The Asia-Pacific business of Anheuser-Busch InBev estimated its China sales to have declined by US$285 million in January and February compared to the same period last year, it said in notes to its 2019 financial results on Thursday. The hit is equivalent to about 4 per cent of its revenue last year, based on its latest accounts.
Profit also declined by US$170 million over the period, the company said in the report, referring to its normalised earnings before interest, tax, depreciation and amortisation or Ebitda. That is about 8 per cent of its full-year figure in 2019. The company’s top beer brands in China include Budweiser, Corona, Hoegaarden and Harbin.
“The impact of the virus outbreak on our business continues to evolve,” Budweiser said in the financial report. “We have observed almost no activity in the nightlife channel and very limited activity in restaurants.”
Other retail channels also recorded a meaningful decline, it said, but e-commerce sales growth accelerated significantly.
The viral outbreak has so far infected more than 82,000 people and killed at least 2,800, mostly in mainland China. The epidemic put a halt to a strong start in the opening three weeks of 2020 just as Budweiser was launching its largest ever Lunar New Year campaign, prompting the brewer to also shut some of its breweries including in the epicentre of Wuhan.