Heineken defies China’s beer market slump with rapid growth through local partnership

Heineken defies China’s beer market slump with rapid growth through local partnership

While the majority of Western consumer brands are finding it difficult to keep growing in China's slowdown economy, Heineken stands out as an unexpected exception. In 2024, the Dutch brewer recorded a virtual 20% rise in mainland beer sales, while the overall Chinese beer market fell by an estimated 4% to 5%. The rush comes after a strategic 2018 agreement with China Resources Beer, the nation's biggest domestic brewer, with exclusive rights to distribute Heineken's brands in return for a 21% stake in China Resources Beer.

The partnership has enabled Heineken to expand rapidly, with last year's total mainland volume rising to almost 700 million litres — sufficient to pour a pint into the hands of each of China's residents. The brand's exposure has spread far beyond its once-stronghold provinces in the south, thanks to marketing pushes including sponsorship of the Shanghai Formula 1 Grand Prix and tapping China Resources' vast distribution network.

China's beer industry has been structurally ailing for years, burdened by diminishing consumer confidence and overcapacity in the market. But breweries such as China Resources are counting on premiumization to fuel profit expansion, and Heineken is now central to this plan. The Dutch lager, typically being 20% pricier than the norm, squarely positions itself in the premium category that Chinese brewers are keen to seize.

Analysts contend Heineken's momentum is most impressive among international rivals. "Heineken's growth rates have certainly beaten them hands down," Bernstein's Euan McLeish said. Carlsberg and Budweiser, on the other hand, have registered flat or falling sales, even after years of Chinese distribution investment.

Heineken gains from what its worldwide investor relations director, Tristan van Strien, describes as a "very healthy transactional relationship" with China Resources. "They need us and we need them," he stated, highlighting interdependence as each company trends through a complicated and competitive marketplace.

Risks to brand and profit

Risks still exist despite the success. Heineken had to book an €874 million impairment charge in 2023 because of China Resources Beer's declining share price. Heineken does not report royalty or dividend payments from the China deal publicly, but reported that the joint venture yields 6-7% of Heineken's total global net income.

There is also brand dilution worry as Heineken grows aggressively throughout China. "China Resources doesn't actually have a track record of developing premium brands," McLeish indicated. As much as aggressive marketing has pushed fast growth, it could destroy Heineken's premium status if pricing and exclusivity are not properly controlled.

Company managers assure they are trading off volume growth against brand value. China Resources Beer investor relations director Kevin Leung said some promotions but no deep discounts had been offered. Heineken's Amstel brand also doubled sales during early 2025, further illustrating momentum in a market still profitable despite its issues.

A long-term wager on China's changing consumer

For Heineken, the long-term prospect in China continues to outweigh short-term fluctuations. "Premium beer does fantastic in times of downturns," van Strien said, observing that nowadays it only takes 37 minutes of working for the average Chinese customer to be able to buy a pint of premium beer — up from more than an hour a decade earlier.

Heineken managers view the partnership with China Resources as a 20-year cycle of consumer change. "The truth is, having local ownership is usually a plus for us," van Strien said. The deal has no definitive end date and may turn out to be one of Heineken's most precious global holdouts as international beer markets keep changing.