Foreign Beermakers Raise a Glass to China

Not so long ago Lu Yizhi found foreign beer an expensive indulgence. Now the 32-year-old tour guide is feeling flush, and he’s not reluctant to pay a premium for a brew with an international pedigree. “I like the heavy taste of imported brands, especially the European ones,” Lu says as he sips a mug of Heineken and keeps an eye on a soccer game between AC Milan and FC Barcelona in a sports bar in Shanghai. “I don’t mind paying a few yuan more.”

Overseas brewers are counting on drinkers such as Lu to help them shore up profits in the world’s biggest beer market. Although local beers often sell for less than 2 yuan (32¢) a bottle, foreign makers are stepping up efforts to persuade drinkers to switch to brands such as Anheuser-Busch InBev’s Budweiser—at more than triple the price of domestic brews. “Foreign premium beer has become more and more popular, especially among young people with more education and income and a greater acceptance of foreign goods,” says Olive Xia, an analyst with Core Pacific-Yamaichi International in Shanghai.