Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Beer; Cider/perry; RTDs/High-strength premixes; Spirits; Wine
Executive summary
Alcoholic drinks see decline in demand
Total demand for alcoholic drinks saw a drop over the review period. Along
with the economic recovery seen in Hong Kong since 2004, GDP has grown
healthily, as has consumers' disposable income. The unemployment rate is also
falling in line with Hong Kong' s improving economy.
Wine saw a notable performance in 2007, driven by the growth of the fine wine
drinking culture in Hong Kong, underpinned by reduced duty on wine. Spirits
also saw notable growth due to the revival of whisky and the popularity of
cocktails. Beer suffered due to the lack of international sporting events in
2007. Despite the tax cut from 40% to 20% at the end of the review period, the
small percentage of reduced retail price was unable to offset the reduction in
demand. The poor performance of beer dragged down the alcohol drinks
environment as a whole due to the high share held by beer. In RTDs the
withdrawal of the leading brand led to a slump in sales.
Local production of San Miguel ceases by the third quarter of 2007
With the shift of San Miguel' s production line to Mainland China in September
2007, local production of beer will tumble, with only a few microbreweries
left in Hong Kong. All other alcoholic drinks in Hong Kong will be imported
products. The closure of San Miguel brewery in Hong Kong is due to high
production and operating costs as reported. Thereafter, beer will be mainly
imported. Despite of the closure, San Miguel continues to be active in the
country to sustain its market presence in the midst of fierce competition.
Wine and spirits distribution through specialists and supermarkets increases
Consumers tend to seek more professional wine selling services, particularly
specialist retailers. Nevertheless, competition between specialist retailers
and supermarkets is strong. Supermarkets benefit from offering products at
lower prices with more souvenirs than specialists, especially during
festivals. For beer, cider/perry and RTDs, supermarkets and convenience stores
account for the major proportion of sales.
Limited growth predicted for forecast period
Over the forecast period most alcoholic drinks are expected to see healthy
growth, but overall performance will be affected by the decline in beer, which
accounts for a considerable proportion of total sales. Wine and spirits are
sectors likely to continue to demonstrate organic growth as the reduction in
taxes offers a more favourable investment climate and stimulates demand among
consumers. With the ongoing education on the health benefits of consuming
wine, demand for wine is likely to grow from strength to strength in the
forecast period.
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