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As Chinese Beer Prices Surge, CPI Is Set To Pass 6%; Here Comes Shrinkage

Tyler Durden's picture





 

Yesterday we reported that China just hiked its fuel prices for only the second time in 2011. Now, again courtesy of Business China, we find that something far more important to the Chinese population is about to surge in price: beer. "The National Development and Reform Commission (NDRC), China’s top economic planner, has hauled in representatives from China’s four largest beer makers (China Resources Snow Breweries Co. Ltd., Tsingtao Brewery Co. Ltd., Beijing Yanjing Brewery Co. Ltd. and the China unit of Belgian Anheuser-Busch InBev NV ) for talks over their price hikes, as it looks to tackle public concerns over soaring inflation. " Since February, the cost of beer production has risen by RMB 94 per ton, which explains the beer makers’ unanimous price hikes,” the person said. Since January, CR Snow Breweries, China’s largest brewer by volume, has raised prices by more than 10% in Sichuan, Liaoning and Anhui provinces, where it enjoys a dominant position in the market. Tsingtao Brewery also hiked prices of several products in the following months by an average of 10%, the company announced earlier." This follows news from the China Securities Journal that Chinese CPI, which recently dipped again below 5%, is about to have a breakaway month in March. "Chinese consumer prices are likely to rise more
than 5% year-on-year in each month in the second quarter and the
inflation rate may even surpass 6% in some months,
the official China
Securities Journal warned in a front page editorial published Wednesday." And while energy is energy is a major component of Chinese CPI, it is food that is the main variable: as was discussed previously on Zero Hedge, whereas food is merely 7.8% of total CPI, in China it is about 30% (this is before the recent CPI weighting adjustment). Which means a desperate China is now forced to resort to that ultimately last ditch attempt at covering surging prices- Shrinkage "Resigned to rising raw materials prices, brewers are figuring out new ways to offset higher costs. “One way of countering the costs is to reduce beer capacity by as much as 100 milliliters for a 660-ml bottle,” said the head of a local beer company." Surely, the dumb local peasantry will never figure this cheap trick out.

More from Business China:

Since January, CR Snow Breweries, China’s largest brewer by volume, has raised prices by more than 10% in Sichuan, Liaoning and Anhui provinces, where it enjoys a dominant position in the market.

Tsingtao Brewery also hiked prices of several products in the following months by an average of 10%, the company announced earlier.

The beer maker is considering another 5% hike for its core products this month, according to several industry analysts and market watchers.

“Costs of raw materials have been rising since the second half of last year, and then the cost of labor also went up by almost 30% since the beginning of this year,” said an industry insider.

The NDRC said it understood the position of beer makers given their rising costs, but said gains in liquor prices were inappropriate as liquor makers’ production costs had not risen by as much as those of brewers. The commission urged both beer and liquor makers to stabilize prices.

Prompted by rising inflation in China - the consumer price index (CPI) might have risen above 5% in March according to some analysts – government bodies are trying to take measures to contain or bring prices down. The central government is targeting a 4% increase in the CPI this year.

Chinese media have been reporting that many manufacturers, P&G and Unilever included, are planning to increase the prices of cleaning and personal care items by 10% on average from April.

Questions have been raised by commentators as to whether some leading industry players are colluding to raise prices.

Consumer goods makers and food and drink enterprises have been invited by the NDRC to discuss putting off their price hikes.

Next up: booze subsidies, import tarriffs and Chuck Shumer going apeshit over Budweiser layoffs. In the meantime, the Jasmine Revolution is drinking its last afforadble shots of rice vodka before it gathers the courage to known on the doors of the politburo.

 

 


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Fri, 04/08/2011 - 14:53 | Link to Comment RobotTrader
RobotTrader's picture

Chain-selling in pretty much everything this afternoon.  Industrials, Golds, Oils, everything.

Another follow through day like this, then Lacker will change his mind and demand QE3 instantly.

Fri, 04/08/2011 - 14:56 | Link to Comment camaro68ss
camaro68ss's picture

Beer prices going up, noooo not the beer, anything but the beer! we are all doomed!

how am i going to get my buzz on to help me forget about this mess

Fri, 04/08/2011 - 15:01 | Link to Comment Ruffcut
Ruffcut's picture

Beer prices going up.

Them be fightin words, BOY!

Fri, 04/08/2011 - 15:18 | Link to Comment spiral_eyes
spiral_eyes's picture

the solution to rampant chinese inflation (export less) is the spark for western hyperinflation (can't manufacture enough to make up the shortfall)

Sat, 04/09/2011 - 00:22 | Link to Comment i-dog
i-dog's picture

I'm surprised by this item. The Chinese don't drink much beer per capita at all (couldn't even find any stats ... not even in the top 50 per capita consumers on Wiki).

Most of them are almost allergic to alcohol !!

Fri, 04/08/2011 - 15:48 | Link to Comment The Limerick King
The Limerick King's picture

The Chinese inflation is here

My God man just look at the beer

It now costs a lot

To make fatties look hot

They're better off turning full queer

 

Fri, 04/08/2011 - 15:00 | Link to Comment BigJim
BigJim's picture

Don't worry, the feds will appoint JPM to administer the new Beer Stamps Program.

Fri, 04/08/2011 - 15:04 | Link to Comment Long-John-Silver
Long-John-Silver's picture

Boil rotting potatoes and sugar in a copper kettle. Cut the heads and tails so you don't go blind. Near instant gratification.

Fri, 04/08/2011 - 21:45 | Link to Comment StychoKiller
StychoKiller's picture

Just glad I bought a couple of bottles of Sake last month at World Market™

Fri, 04/08/2011 - 14:57 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Rice price going up: replace rice with plastic.

Beer price going up: replace beer with piss.

Fri, 04/08/2011 - 14:59 | Link to Comment tmosley
tmosley's picture

Oh God, they're going to start making them drink NA beer?

Fri, 04/08/2011 - 15:27 | Link to Comment JustPrintMoreDuh
JustPrintMoreDuh's picture

+silver bullet

Fri, 04/08/2011 - 14:51 | Link to Comment The Axe
The Axe's picture

Beer....Fuck ---this is bad....

Fri, 04/08/2011 - 15:08 | Link to Comment SPUTNIK
SPUTNIK's picture

I'll tell you something. I'm from India, Bangalore. I see that job market is booming here. I work for an International call center here and my company is getting new projects every fortnight. All are USA clients. All the wealth from US is flowing to India. You should look at the face of the clients who visits our facility, they look scared and humbled.

USA rip!!!!

Fri, 04/08/2011 - 15:52 | Link to Comment duo
duo's picture

While beer has essentially doubled in price in the last 4 years, wine is up maybe 20%.  Why?

Beer => conglomerates => grains => => commodities markets => hundreds of well-paid executives (InBev, etc).

Wine => small producers => grape co-ops => supply/demand, no futures markets or GS/JPM influence

Fri, 04/08/2011 - 21:45 | Link to Comment StychoKiller
StychoKiller's picture

Right now, I've got 6Gal of Mead aging in a carboy...

Fri, 04/08/2011 - 14:57 | Link to Comment LostWages
LostWages's picture

No cerveza, no trabajo bitchez!

 

Fri, 04/08/2011 - 21:46 | Link to Comment StychoKiller
StychoKiller's picture

Um, shouldn't that be:  No trabajo, no cerveza?

Fri, 04/08/2011 - 14:55 | Link to Comment John Law Lives
John Law Lives's picture

But the Great Chairsatan says Central Planning is not the cause of this surge in food and energy.  It is because of exploding demand.  The Great Chairsatan wouldn't lie to us, would it?

Fri, 04/08/2011 - 14:56 | Link to Comment tmosley
tmosley's picture

Who cares?  You can't eat beer.

Fri, 04/08/2011 - 15:00 | Link to Comment Ruffcut
Ruffcut's picture

Hey der dude, beer is food.

Fri, 04/08/2011 - 15:04 | Link to Comment tmosley
tmosley's picture

But you can't eat food either!

You can only eat iPads.

Fri, 04/08/2011 - 15:29 | Link to Comment SPUTNIK
SPUTNIK's picture

I'll tell you something. I'm from India, Bangalore. I see that job market is booming here. I work for an International call center here and my company is getting new projects every fortnight. All are USA clients. All the wealth from US is flowing to India. You should look at the face of the clients who visits our facility, they look scared and humbled.

USA rip!!!!

Fri, 04/08/2011 - 16:09 | Link to Comment tmosley
tmosley's picture

Yes, India is truly wealthy.  A half ounce of gold for every citizen will do that.  Her true wealth will become apparent in the coming years.  Your gold alone may be enough to buoy your people to US living standards (though not to 90's US living standards).

You guys need to work on your manufacturing base, though, and secure energy resources, as you burn three times as much as you produce, much like the US.  Sadly, your bureaucracy and regulatory structure are extreme hinderances.  

Fri, 04/08/2011 - 17:13 | Link to Comment SPUTNIK
SPUTNIK's picture

I'll explain that for you. When dollar collapses (dollar index less than 71) india will come down badly. The main thing for India is oil and the main thing need to get that oil is US DOLLAR RESERVES. Now, when dollar collapses, the indian dollar reserve will be useless and we can't buy oil.

Fri, 04/08/2011 - 17:47 | Link to Comment fiddler_on_the_roof
fiddler_on_the_roof's picture

True, but I think the true pain will be when DXY is less than say 65. you sound smart to be more than working in a call center.

Fri, 04/08/2011 - 18:05 | Link to Comment SPUTNIK
SPUTNIK's picture

I'm here on zh just watching all the blogs for more than 1 year now. I logon to investmentwatch.com, zh, marketwatch.com blog, businessinsider.com and kitco blogs.

Stuyding macro economics from past 2 years now. The world economic and social situation is really bone chilling. When I try to explain this to my friends and relatives they all ignore it and they think i'm hysterical.

Fri, 04/08/2011 - 18:12 | Link to Comment SPUTNIK
SPUTNIK's picture

Why are americans sending their executives here like crazy, I really don't understand it. Our management is fooling them with all promises and I'm really ashamed.

The biggest culprits being IBM, HP, DELL and ALL OTHER ACCOUNTING AND FINANCIAL COMPANIES.

I bet that there are more IBM employees in India than in USA.

What is the corporate tax collected from these large companies IN USA. For usa they neither create jobs nor tax revenue. They are parasites.

Fri, 04/08/2011 - 15:30 | Link to Comment chubbar
chubbar's picture

There's a sandwich in every pint!

Fri, 04/08/2011 - 21:48 | Link to Comment StychoKiller
StychoKiller's picture

A sandwich in every glass!

Fri, 04/08/2011 - 16:29 | Link to Comment SilverRhino
SilverRhino's picture

Obviously you have never tried to drink liquid pumperknickel aka Guiness. ;-)

Fri, 04/08/2011 - 16:55 | Link to Comment velobabe
velobabe's picture

all I eat when in Beijing was beer. I did not like the food. they sold the beer in little street cart vendors, it was fun!

Fri, 04/08/2011 - 21:51 | Link to Comment StychoKiller
StychoKiller's picture

So, not adventerous enough to try fried crickets on a stick?

Fri, 04/08/2011 - 15:00 | Link to Comment Sweet Chicken
Sweet Chicken's picture

Shit just got real!

Fri, 04/08/2011 - 14:59 | Link to Comment yabyum
yabyum's picture

Look for your 40 oz to become a 30 oz. Bastards!

Fri, 04/08/2011 - 15:01 | Link to Comment plocequ1
plocequ1's picture

Carlo Rossi Merlot, $15 for a huge jug. 

Fri, 04/08/2011 - 15:12 | Link to Comment JohnG
JohnG's picture

Life is too short to drink bad wine my friend.

Fri, 04/08/2011 - 16:17 | Link to Comment Bam_Man
Bam_Man's picture

Castello di Bossi Chianti Classico Berardo Riserva 2006, $24.99/bottle.

There is absolutely NO inflation in the price very good Italian wines. If anything, the prices are dropping due to tapped-out consumers trading down to...ahem... Carlo Rossi and "boxed wines". 

Fri, 04/08/2011 - 17:03 | Link to Comment velobabe
velobabe's picture

I have been enjoying buyin Pinot G at my local wine shop. from small little vineyards around all of Italy. he said they aren't going up in price.

Fri, 04/08/2011 - 18:38 | Link to Comment Bam_Man
Bam_Man's picture

Good for you velobabe!

If you want to give a very nice approachable Italian red a try, I recommend Michele Chiarlo Barbera d'Asti Superiore Le Orme 2008. A beautiful, fruity Piedmont red for about $12!

Fri, 04/08/2011 - 17:08 | Link to Comment velobabe
velobabe's picture

V

Fri, 04/08/2011 - 15:03 | Link to Comment Lothar the Rott...
Lothar the Rottweiler's picture

Go long Boone's Farm!!!

Fri, 04/08/2011 - 15:02 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

Captain Broccoli, should I buy the fucking dip in the SPY now?

Fri, 04/08/2011 - 15:03 | Link to Comment Global Hunter
Global Hunter's picture

...but there's panic on the streets of Carlisle

Dublin, Dundee, Humberside

I wonder to myself...

Burn down the CNBC

Hang the blessed chairsatan

Hang the DJ hang the DJ hang the DJ hang the DJ 

Hang the DJ

Fri, 04/08/2011 - 23:21 | Link to Comment TGR
TGR's picture

+1 for the Moz

Fri, 04/08/2011 - 15:04 | Link to Comment Cruel Aid
Cruel Aid's picture

Packaging costs getting jacked at the expense of product. Just charge more/bottle and stop screwing with my intoxication calculations.

Fri, 04/08/2011 - 15:08 | Link to Comment Global Hunter
Global Hunter's picture

Had a quick boo on CNBC and they're speculating today's "sell off" is because of a knee jerk panic reaction.  Love it, they're definitely jumpy. 

Fri, 04/08/2011 - 15:06 | Link to Comment Dick Darlington
Dick Darlington's picture

Let them drink iPads...

Fri, 04/08/2011 - 15:08 | Link to Comment Misean
Misean's picture

Beer and booze creates transients. The inflation is transitory. Simple logic. I'm going to go try and distill a Droid.

Fri, 04/08/2011 - 15:10 | Link to Comment apeakunderthehood
Fri, 04/08/2011 - 15:12 | Link to Comment Yen Cross
Yen Cross's picture

Global financial meltdown part 2 coming up! I'm long bootlegging.

Sun, 04/10/2011 - 06:47 | Link to Comment MSimon
MSimon's picture

Indoor farming.

Fri, 04/08/2011 - 15:12 | Link to Comment nobusiness
nobusiness's picture

Plunge Protection Team powers activate!!!!

Fri, 04/08/2011 - 15:21 | Link to Comment CrockettAlmanac.com
CrockettAlmanac.com's picture

Form of a printing press!

Shape of a helicopter!

Fri, 04/08/2011 - 15:23 | Link to Comment nobusiness
nobusiness's picture

Nice add on.

Fri, 04/08/2011 - 15:15 | Link to Comment Seasmoke
Seasmoke's picture

the good news is when you tell the cop you had 12 beers tonight, you will not even be buzzed

Fri, 04/08/2011 - 15:18 | Link to Comment Pchelar
Pchelar's picture

When they are talking about the price per ton, you know they are making swill not fit for a man.

It would not take much acreage in barley and hops to set up a man with all the beer he needs.

Fri, 04/08/2011 - 15:22 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

Tsingtao Lite, the new Chinese QE2 brew in the BTFD Cup. On sale now at all local global markets, just $666 for a 9 ounce taste of Communist Chairsatan whup ass.

The Chinese Fight Club is on Bitchez. http://www.youtube.com/watch?v=ZaKN3_D0l3Q

Fri, 04/08/2011 - 16:24 | Link to Comment Yen Cross
Yen Cross's picture

Ghost City Stout    Fukishima Pale

Fri, 04/08/2011 - 16:24 | Link to Comment JustPrintMoreDuh
JustPrintMoreDuh's picture

+rofl

Fri, 04/08/2011 - 15:34 | Link to Comment defn8Dog
defn8Dog's picture

I want the Buckets o' lil'beers franchise in Shenzhen. 

Fri, 04/08/2011 - 15:37 | Link to Comment reader2010
reader2010's picture

Let them drink horse pee!

Fri, 04/08/2011 - 15:40 | Link to Comment Saxxon
Saxxon's picture

The Chinese beer is more like near-beer.  It is the weakest brew (in terms of alc. content) I have ever tasted.  All the countries around brew normally (hats off to India, whose Taj is a tasty drink).

When in the PRC, ask for the sorghum white lightening that they sell in little 'alcoholic's best friend' half-pint bottles - even at the restaurants.  It's a good drink straight and burns clean; no hangover in the morning.  Chase it with the near-beer.

Fri, 04/08/2011 - 22:14 | Link to Comment TGR
TGR's picture

You're half right - there is a hell of a lot of weak brews in China, round the 2.5-3.6% levels.

But given there are over 400 hundred breweries in China, not to mention an average selling price of about 50-60 cents per 660ml bottle, there's something for everyone.

One of the most popular beers, Tsingtao, is superb - the one in the small 290ml brown bottle, gold label. It's near full strength (4.6-4.9% from memory) and is basically a Bavarian brew, original recipe. Tsingtao used to be German back in the heyday.

 

 

Fri, 04/08/2011 - 15:48 | Link to Comment Chuck Yeager
Chuck Yeager's picture

Homebrew, Bitchez!

I can brew beer for $.35 a bottle!

Fri, 04/08/2011 - 15:48 | Link to Comment 1fortheroad
1fortheroad's picture

Here in Brasil the beer prices at the bars go up at least 10-20% a year and the

people dont seem to mind. Homes have gone up 300% in my area in the last 4 years.

Lots are up 400%. 

Fri, 04/08/2011 - 16:18 | Link to Comment Bam_Man
Bam_Man's picture

"Escalator up....Elevator down."

Fri, 04/08/2011 - 15:50 | Link to Comment Urban Redneck
Urban Redneck's picture

The Chinese have so far failed to reduce their "undesired" excess population through

1) massive forced migration and famine

2) an engineered shortfall of citizens capable of bearing children

3) massive pollution

next step

Building a new distillery at Fukushima to increase the beer supply and lower domestic  prices

This will facilitate the forthcoming bootleg'd 1933 FDR plan for private gold confiscation, after the bootleg Chairsatan completes his current efforts to lull the Chinese masses into mindless acquisition to benefit their economic masters

Final result, much more wealth to divided amongst a much smaller citizenry.  

To borrow a phrase from my friends in Bangkok- China- Same, Same, but Different   

Fri, 04/08/2011 - 15:51 | Link to Comment goldenbuddha454
goldenbuddha454's picture

George talked about the "shrinkage factor" on Seinfeld.  Its a little different talking about money, but its still concerning especially when your yuan shrinks so much you can't buy a bottle of beer anymore.  Bernanke isn't concerned with the shrinkage factor.  He prefers to inflate it instead.

Fri, 04/08/2011 - 15:58 | Link to Comment Urban Redneck
Urban Redneck's picture

Well, as long as we are dropping dick jokes and making MMcb's life tomorrow more difficult-  Chairsatan has a very small 'tool' compared to both his EU & Chinese counterparts.

http://www.zerohedge.com/article/us-energy-secretary-expresses-great-concern-due-high-oil-price-saudi-oil-output-declines#comment-1150109

Fri, 04/08/2011 - 15:53 | Link to Comment Byte Me
Byte Me's picture

Ah, let them drink piss. Oh wait, Tsingtsao already is..

Fri, 04/08/2011 - 16:01 | Link to Comment williambanzai7
williambanzai7's picture

Everybodies pissed off

Fri, 04/08/2011 - 16:15 | Link to Comment Byte Me
Byte Me's picture

Print more beer.

Fri, 04/08/2011 - 16:34 | Link to Comment market le pew
market le pew's picture

Well, I used to drive big Cars with huge Gas consumption. I sold them all as long as it is still legal to own a SUV. So, using Taxis for my late night transportation now  means that my alcohol intake has quadrupled as I don't have to worry about drink driving any more. So, think twice and don't blame rising commodity prices for rising beer prices, the reason for the recent shoot up in beer prices is me!!!

Fri, 04/08/2011 - 17:12 | Link to Comment velobabe
velobabe's picture

drink driving, it is!

Fri, 04/08/2011 - 18:56 | Link to Comment Gold 36000
Gold 36000's picture

It is really funny to travel to some third world countries and see the tiny beer cans.  Also the cigarettes are smaller!

Fri, 04/08/2011 - 18:58 | Link to Comment Gold 36000
Gold 36000's picture

It is really funny to travel to some third world countries and see the tiny beer cans.  Also the cigarettes are smaller!

Fri, 04/08/2011 - 18:59 | Link to Comment bugs_
bugs_'s picture

Well well Chinese beer issues.  What would we call a Chinese Joe Six-Pack?

Just remember what old Jack Burton says at a time like this!

Fri, 04/08/2011 - 20:08 | Link to Comment tomster0126
tomster0126's picture

Asians love to drink...and I love to watch them get drunk [-_-]  why does it seem like China is making all of the right moves lately though?  We should raise the price of beer and other alcohol instead of fuel at home.

 

www.forecastfortomorrow.com

Fri, 04/08/2011 - 23:16 | Link to Comment Mr. Regression
Mr. Regression's picture

Come on now, there's plenty of elasticity in the low end of the wine market.  Reviews of some fine products can be found at.....

www.bumwine.com

In times like this it's really about lowering the overhead folks.  Numbing the senses helps too.  No low alcohol content in this bunch.

Are we headed for a bull market in Thunderbird? or Cisco? 

Cheers,

M.R.

Fri, 04/08/2011 - 23:27 | Link to Comment thames222
thames222's picture

Noooo!  Not my Chinese ale!  Seriously though, a pretty inventive move by them.  did anyone else think their recent ban on the word "luxury" in advertisements was a little weird though?  Just sayin...

 

www.forecastfortomorrow.com

Sat, 04/09/2011 - 00:03 | Link to Comment Ted K
Ted K's picture

You actually can't imagine how dumb the average Chinese is over there.  I spent more than a vacation over there.  Example A of about a zillion I could give on the intelligence of your average Chinese:  I was sitting at the window seat of a medium size restaurant in a suburban area on the outskirts of a major city there.  It was roughly 4 in the afternoon and they were firing up some grills for some shish kebab type fair, (meat on a stick) just outside the window where they had some small tables set up for people to eat outside.  They fired up the charcoal using used toilet paper. I kid you not. Used toilet paper. Nothing gets the taste buds going eating your meal and observing that my friends.  Countryside Chinese honestly are the most dumb-ass people you will ever see on the planet. They have Africans beat by a mile.

Sat, 04/09/2011 - 10:23 | Link to Comment americanspirit
americanspirit's picture

You can't actually imagine how dumb the average American is over there. I've spent a good portion of my life there. Example A of about a zillion I could give you on the intelligence of your average American. They have elected, in sequence, the following people - Nixon, Ford, Carter, Reagan, Bush, Clinton, Bush and - wait for this one - Obama. Americans have been eating shit from TPTB for over 40 years, watching shit on TV, seeing their economy turn to shit, happily stuffing shit by a 'fast food' industry and purveyors of GMO 'food' down their throats, allowed their sons and daughters to be turned into piles of burning shit courtesy of IEDs in the name of serving their country in wars of imperialist aggression, gifting their beloved little tykes with toys containing shit like cadmium and lead, watched their life savings turned into sheets of toilet paper called Federal Reserve Notes, and still - still! - they line up every day for hours on the 'freeways' to go to their 'jobs' to earn 'money' so they can rush out and buy more shit. They are truly the most dumb-ass people you will ever see on the planet. They have Chinese beat by a mile.

Wed, 05/25/2011 - 05:14 | Link to Comment ClairD
ClairD's picture

Meh, even the temporary happiness will get pricier in the end. Beer prices escalate faster than they have in three years, and that's not just in China. You can read some more here:  The cost of beer is still on the rise, newstype.com. So they're lessening the amount of beer per bottle? Then that amount of beer won't be enough to make me forget this happened.

Do NOT follow this link or you will be banned from the site!