Tsingtao Brewery Co., China’s second-largest beer-maker by market value, reported that earnings fell 11% in the six months ended June, as poor weather and the country’s economic slowdown affected sales.
Net income was 1.07 billion yuan ($160 million) in the first half, compared with 1.2 billion yuan a year earlier, according to a recent statement sent to the Shanghai Stock Exchange.
Brewers in China are introducing more premium products as they seek to differentiate themselves amid stiff competition for drinkers, and as the country’s slowdown led to weakening consumption. Sales were further dented this summer, traditionally the peak period for beer-drinking, as China was hit by its worst floods since 1998 and cooler-than-usual weather.
China’s beer market remained under pressure in the first half of 2016, as beer sales were negatively impacted by weak food and beverage consumption and adverse weather, according to the beer-maker in its recent statement. International beer-makers are also expanding in China, making competition “fiercer”, the company said.
Tsingtao Brewery shares have slumped 25% this year, while the benchmark Hang Seng Index rose 5%. Its rival, China Resources Beer, has seen its stock rise about 15% during the same period.
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