China's beer market, the world's largest, set for bounce as drinkers go high-end

China, the world's largest producer and consumer of beer, is expected to see a consumption recovery in the second half of this year, favoring premium offerings, on the back of sporting events.

CGS International expects a recovery in beer consumption in the latter part of the year following an estimated decline in volumes in the first half of the year compared to 2023.

Sporting events such as the ongoing Euro 2024, the upcoming Copa Americana and Paris Olympics, coupled with hotter weather, are expected to drive up demand for the beverage.

CGS analysts Lei Yang and Sun Feifei highlighted in a report published last month that higher-than-expected sales of premium beer products in the catering and entertainment channels are expected to lift the sector.

Pointing to the Euro 2024, Chinese online database QiChaCha noted that bars and stores have been decorated with European Cup merchandise and they are offering sports-themed meals to cash in on the frenzy.

"The beer market has shown a clear growth trend, and major beer brands have competed to launch products and services that match scenario-based consumption," according to a note by Chinese online database QiChaCha, which revealed that beer-related enterprises in China had grown by more than 7,000 last year.

"The European Cup ignites the 'beer economy,'" the firm said, adding that China's beer industry had shown a clear trend towards high-end offerings.

The trend favoring higher-end beer is expected to boost margins for breweries, further aided by cheaper barley prices that are driving costs lowers, Sun and Lei said.

They cited data from China customs agency and their own research, showing that the average imported barley price fell by 30% year on year in January to April to US$273