Due to a decrease in business entertainment activities, even high-end beers are not selling well. This is another sign of declining consumption in China, where the economy has been stuck in a vortex of deflation for a long time.
42-year-old automotive parts company manager Jason Huang often needs to entertain clients and frequently treats them at KTV bars in Shanghai, discussing business while indulging in heavy drinking until late at night.
However, everything has changed now. “Salespeople still need to connect with clients,” he told Bloomberg, “but due to poor business and thin profits, a simple dinner is usually enough for entertaining.”
After the COVID-19 pandemic, Chinese consumers’ confidence has not yet recovered, leading to the closure of upscale bars, nightclubs, and high-end restaurants in major cities such as Shanghai due to a significant decrease in customers.
Major beer manufacturers such as Carlsberg, Heineken, Tsingtao Brewery, and AB InBev Asia-Pacific used to rely on these establishments to sell high-end beers, seeing them as a key source of profit growth. However, consumers now prefer cheaper beers or opt to drink at home to save money.
In 2013, high-end beers in China once reached a price of 18 yuan per bottle. In contrast, the cheapest domestic brands like Snow and Harbin’s economy beers are priced as low as 4 yuan.
But the situation took a turn in 2024. In China’s beer market with an annual sales volume exceeding 180 billion yuan, AB InBev has always dominated the high-end and ultra-high-end market segments, leading in beer prices among major brands and maintaining a competitive position in nightlife and upscale dining channels. However, the offline consumption scenario for beer has weakened in recent years, directly impacting AB InBev.
For AB InBev in 2024, its core Chinese market experienced a severe slump, with market volume decreasing by 11.8% and annual revenue dropping by 13%.
In February 2025, AB InBev announced that it would shift resources from the ultra-high-end market to the high-end market, indicating a decrease in product quality and a lower price range of 8 to 10 yuan.
China’s nightlife has struggled to recover from the strictest pandemic lockdowns imposed by the Chinese Communist Party. Many businesses in major cities were devastated. Previously bustling bars, restaurants, and nightclubs in downtown Shanghai now seem eerily quiet.
Jacky Lu, an employee responsible for reservations at a karaoke bar in Shanghai, told Bloomberg that business has significantly declined, with a sharp decrease in corporate entertainment outings.
“I know that dozens of venues have closed in the past two years,” he said. During the peak period, customers would spend 100 yuan on a glass of high-end AB InBev beer and consume dozens of bottles every night in each room.
According to mainland Chinese media Securities Times, bars, KTVs, and other nightlife establishments and high-end restaurants are the main consumption places for high-end and ultra-high-end beer brands, with higher alcohol prices. However, the impact of consumer confidence on these venues has been most noticeable in the last two years. In comparison, Chinese consumers are much more sensitive to mass consumer product prices than Europeans and Americans.
Bloomberg reportedly cited insiders saying that AB InBev plans to lay off thousands of employees in China to reduce costs. These insiders prefer to remain anonymous as this is a privately discussed matter. An AB InBev spokesperson denied any plans for layoffs.
Apart from beer, other fast-food chains and bottled water manufacturers are also choosing to lower prices to attract budget-conscious Chinese shoppers. The sluggish real estate market has eroded Chinese household wealth, significantly hindering a broader consumption rebound.