With production of 20.5 Million Tonnes in H1 2009, the Chinese beer industry is expected to maintain its top position of largest beer producing country globally this year.

In the backdrop of 20.5 Million Tonnes of beer production in the first half of 2009, China is expected to emerge as the largest beer producer for the eighth time in a row this year, said the China Alcoholic Drinks Industry Association, as reported by CHINA.ORG.CN.

The Chinese beer industry production surged 6% in the first half of this year against the corresponding period last year. China has been consistently producing around 40 Million Tonnes of beer every year for past few years compared to the United States (the second largest beer producer) and Germany that has a long history of beer production.

China occupied the position of top beer producer worldwide in 2002. At present, there are 251 beer companies and 550 breweries, which mainly produce for the domestic consumption, operating in the country.

Moreover, the Chinese beer market has evolved as the fastest markets across the world but it is still in the mid and late integration phase. Although the industry is significantly affected by the financial crisis, the competition is still very high with beer breweries giving cut throat competition to each other in markets, brands, channels, etc.

At present, the homogenization of various beer products is going at a high level in the country and price is the main factor to influence the beer sales. However, the restructure of beer production will further intensify competition in beer production that may result in high quality. Besides, small bottle and low-alcohol beer is under the development stage.

China imports nearly 50% of beer barley from Canada, Australia, France and other countries. For past some years, the prices of beer barley have gone up in the international market and other raw materials have witnessed ascendency in prices, both factors have critically influenced the beer prices.

According to a Research Analyst at RNCOS, "With total population of over 1.3 Billion and low per capita consumption, beer consumption in China is poised to grow at fast pace in the next few years. High domestic demand will continue to drive the beer production. Besides, the industry will witness M&As in near future that will help in accelerating development in the Chinese beer industry."

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