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U.S. Beer Sales Step Up in Hong Kong
Hong Kong's thirst for good beer has not been curbed by the uncertainty of 1997, when ownership returns to China. As residents prepare for the transfer, beer consumption is rising.
Uncertain economic times have influenced residents to switch from higher priced alcoholic beverages to beer, enhancing the beer market.
Also, consumers in Hong Kong have become more health conscious and perceive the lesser alcoholic content of beer as a plus over other alcoholic beverages.
Beer sales reached 160 million liters in 1995, bringing per capita consumption to 26 liters. Retained imports accounted for 120 million liters.
Opportunities for U.S. beer exporters abound, particularly in the premium and low-priced beer markets. Sales of imported premium beers are expected to reach 50 million liters by 1997.
U.S. Vies With Dutch
While U.S. imports lead the Hong Kong imported beer market in volume, the Netherlands leads in total value with its premium brands.
The United States controlled 54 percent of import volume in 1995, with an export value of HK $515 million (US $1.00 = HK $7.80). That same year, the Netherlands surpassed the United States with sales of HK $516 million, with less than half the volume.
Premium Beer Drinkers Value Quality
Hong Kong buyers of premium beer tend to be status conscious and affluent, 20-35 years old, Asian or Western, and concerned with quality brand image. They probably were educated or have traveled in the West.
Low- and mid-priced beers are consumed by a larger, more varied range of consumers, concerned with good value for their money.
Hong Kong residents buy most of their beer at bars and restaurants, paying as much as 10 times the price that beer brings in retail outlets.
Grocery, Convenience Stores Lead Off-License Sales
The larger Hong Kong supermarkets offer a wide range of beers. Cans and glass bottles dominate the shelves, with the standard 330-milliliter (ml) size most widely used.
A few high-end brands enhance their unique image through unusual packaging. Examples include Grolsch's 473-ml bottle, Kroenenberg's plastic mini-keg and San Miguel's 500-ml "King" can. Larger, 640-ml glass bottles are popular for group mealtime gatherings.
Growth Projected for High, Low Ends
An industry representative revealed that the two domestic breweries, Carlsberg and San Miguel, held over 50 percent of the market volume in 1995. South China Brewing Company, a small independent micro brewery, opened in 1995 but to date has not achieved a significant market share. By the end of 1995, imports held 53 percent of total sales.
The polarization of the beer market is expected to continue through 1997, with the volume of imported premium beers approaching 50 million liters. Additional premium brands are likely to enter this lucrative market.
The low-priced segment of imported brands should maintain current market share, retaining a loyal following from price-conscious consumers.
U.S. products are viewed favorably in Hong Kong, though only a limited number of U.S. brands are now available. As the domestic San Miguel's market share continues to shrink, there is opportunity for other U.S. imports to succeed in the low-priced segment, capitalizing on the current duty structure.
At the opposite end of the market, there is further opportunity for fashionable premium imports, as evidenced by the recent successes of boutique specialty brands.
Market Entry
U.S. exporters can sell directly to retail outlets. But small- to medium-sized companies without experience in this market need a local distributor to handle the promotion and distribution through established channels. One big plus for using local services--distributors of imported beer usually make importation arrangements.
A U.S. exporter must find a distributor not representing a competing beer company, as distributors carry only noncompeting products. It is helpful if the distributor handles complementary products, such as fruit juice, sold through similar channels as the beer.
All beer is subject to a 30-percent duty charge, applied to the ex-factory cost of the product. Importers are required to apply for an import license, which is valid for one year. Also, each shipment of beer imported or exported from Hong Kong requires a permit. A warehouse license is required for storage of dutiable commodities.
Exporters planning market entry strategies should be prepared for some market changes, though the Chinese government has assured continuation of Hong Kong's current economic and social systems for the next 50 years, until 2047.
Three Major Beer Types
Market Information
The U.S. Agricultural Trade Office (ATO) in Hong Kong distributes product information to U.S. food and beverage marketers:
U.S. Agricultural Trade Office
U.S. Consulate, Hong Kong
PSC 464, Box 30, FPO AP 96522-0002
Phone: (011-852) 2841-2350
Fax: (011-852) 2845-0943
Lists of importers and distributors, supermarkets, other retail outlets and official Hong Kong agencies are available from the Foreign Agricultural Service.
For a copy of the report on which this article was based, contact:
Trade Assistance and Promotion Office
AgBox 1052, AGX/FAS/USDA
1400 Independence Ave., SW
Washington, DC 20250-1052
Phone: (202) 720-7420
Fax: (202) 690-4374
For supplier lists and foreign buyer lists:
AgExport Connections
AgBox 1052, AGX/FAS/USDA
1400 Independence Ave., SW
Washington, DC 20250-1052
Phone: (202) 720-7103
Fax: (202) 690-4374
To obtain a dutiable commodities import-export license:
Commissioner of Customs and Excise
Dutiable Commodities Office
Harbour Building
38 Pier Road
Central
Hong Kong
This article is based on a report prepared by Asia Market Intelligence, Ltd., for the Agricultural Trade Office in the U.S. Consulate General, Hong Kong. Phone: 011 852-2841-2350; fax: 011 852-2845-0943.
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