Floods and bad weather, particularly in Southern China, blamed by Chinese brewers for poor sales growth

Persistent rainfall has dampened mobility and consumer spending in China, resulting in slower revenue growth for the country’s major beer manufacturers in the second quarter of this year, according to reports. The challenging weather conditions, particularly in southern and western regions, have put pressure on sales, especially in dine-in channels.

Chongqing Brewery, a prominent player in the Chinese beer market, saw its net profit rise by 4.2% to CNY900 million (USD125.4m) for the three months ending June 30, compared to the same period last year.

Although the company’s revenue also grew by 4.2% to CNY8.9 billion, this was a slowdown from the 7.2% year-on-year growth recorded in the first quarter. The Guangzhou-based brewery attributed the deceleration to adverse weather conditions, according to its earnings report released on August 14.

Li Zhigang, president of Chongqing Brewery, told Chinese news site Yicai that the high external environmental pressure, coupled with persistent rain in South and West China, also significantly impacted beer sales in dine-in channels.

Budweiser Brewing Company APAC, the largest beer producer in the Asia-Pacific region by sales, also reported a significant decline in its Chinese market performance. Sales in China dropped by 10.3% in the second quarter, which the company attributed to “a soft industry, which cycled channel re-openings a year ago, and adverse weather in key regions of our footprint,” according to its financial report on earlier in August.

Budweiser APAC’s overall revenue in the Chinese market also plummeted, by 15.2%. Revenue per hundred litres fell by 5.4% due to heavy rainfall across its core regions, particularly Guangdong and Fujian provinces, the brewer said.