China Spirits Market

The dynamics of the global wine industry are better understood through a brief history of wine as well as an overview of the wine making process. Some countries have longer historical and cultural ties with wine then others and that can affect the quality and perception of the product in the eyes of the consumer. Also, the conditions in which the wine grapes are raised and the processes used to make the wine can create a superior wine and therefore a competitive advantage.

In China stories of liquor can be traced back to almost every period in all of China's history giving Chinese alcohol it's second name of the "Water of History", a legend tells that Yi Di, the wife of The first dynasty's King Yu invented the method to create alcohol.

Guo then introduced Canada to Yanjing’s alcoholic beer by 2007 after they granted Guo the right to represent their imported alcoholic beer and hard liquor. (Pg. 2) By 2009, Yanjing had received exclusive importer rights and sales agent status in Canada due to Guo’s hard work promoting the product to restaurants and grocery stores.

The macro environment surrounding alcohol sales and consumption has generally been stable and has experienced incremental growth throughout history. In the United States, the number of per capita consumption of alcohol has declined slightly, but has consistently remained around 2.5 gallons, per person, per year. The lower class, specifically females in the lower class are responsible for a majority of alcohol consumption in the United States. The highest per capita consumption worldwide is as follows: Luxembourg, Ireland, France, Hungary, and Denmark, (the US ranks 22nd.)  According to one article, “the beverage alcohol industry contributed over $21 billion directly to state and local revenues during 2010. Of that amount, distilled spirits accounted for over $8.8 billion or 41% of this direct revenue” (“Distillery Spirits”).

I read an article that emphasizes and explains how Islam expanded in China. According to Chinese sources, a Muslim embassy engaged in growing and maintaining Islam in China led by Sad Bin Abe Waqqas, the Embassy established mainly at the time of Othman Bin Affan. During the Tang reign, Emperor Gaozong assigned to build the first mosque in China for the memory of Prophet Mohammad. Regards Islam Prohibiting alcohol, many Muslims in China notified drinking beers as a tradition, reminds me of the Timurid Dynasty which they exchange wine for custom

This industry has seen very limited growth since 1986. Based on Exhibit 4 (C-271, the total wine consumption in the US) and Exhibit 5 (C-271, per capita wine consumption in the US) the wine industry is in the maturity stage. It could

With China emerging as a global power in business within the last decade, knowing about doing business in China has become more important than ever. There are both many advantanges and challenges with doing business in China in this modern era, and understanding both sides of this coin is the key to being successful in China. Some aspects to keep in mind include the cultural barrier, the price of the work force in China compared to the United States, and have the “made in China” brand be accepted back in the United States.

Based on the above findings, we can conclude that China would have predominantly less political and legal risk factors compared to India. While both countries governments were entrenched with corruption and some forms of uncertainty, China’s progression over India in terms of trade agreements policies (such as the FTA) provides for a more stable political and legal environment to operate within. Furthermore, India’s high legal drinking age and laws associated with liquor advertising make China’s market seem more appropriate for exporting of wine.

China has become the second beer market in the world today. Tsingtao Brewery is the top beer manufacturer in China. The Tsingtao Brewery was founded in 1903 by German settlers in Qingdao, China.

In the most recent years, domestic sales of wine has declined constantly. The wine consumption is becoming more occasional. This is partially due to an aggressive anti-alcohol campaign and driving restrictions set by the local government, but also facilitated by a lack of marketing strategy: the wine market is loosing touch with the youth (the average age of wine drinker is gone up from 35 to 55) and young people are getting more keen to beer or alcohol pops.

table wine grew 22 percent, while over the same period inroads made by wine imports

Nowadays, in the “Old World” countries of Europe, where the bulk of the volume is still produced, this is of great concern. However, consumers, especially younger drinkers, prefer the high quality wine from famous brands which are imported into Europe by the “New World” player, and the growth rate is at average10% per

From the above evaluation, China is a potential and sustainable growth beer market with political stability, high GDP growth, young population led increase consumption, as well as low market share. It can be determined China as attractive country for foreign direst investment. However, we found most failed brewers, which have not understand the local situation and Chinese culture when they are make an investment in China, such as the personality of Chinese consumer, expenditure availability “no factor contributes more heavily to local brewer dominance….than pricing”5 Also Chinese people have strong patriotic feelings attached, which potentially meant that global beer brands could remain nothing more than passing curiosity. “Guanxi” in important elements for those two successful cases – Tsangtao Beer and South African Breweries, have alliance with a local brewers.

Apart from these two biggest competitors, there are various brands of drinks especially in China. Besides these, it will face several obstacles, such as cultural and social barriers, political barriers and tariffs and trade restrictions.

2011 proved to be a good year for beer, with a 7% total growth volume, amounting to 108 million litres. The demand for beer products continue to grow steadily with the escalating trend of social drinking in Singapore. Previously restricted to venues such as clubs and bars, beer products are increasingly being consumed at local coffee shops or hawker centres or being purchased off the shelf. (EuroMonitor International 2011, Beer in Singapore)