New regulations on beer consumption tax implemented! Institutions: Favorable to leading liquor companies with market share concentration

Ask AI · How will the new beer excise tax rules drive market share concentration among leading brewers?

Recently, the State Taxation Administration released an announcement, adjusting the tax calculation basis for beer production enterprises—from “a single reference to the external selling price”—to an upgrade of “comparing two prices and charging based on the higher one.” Shares of leading beer listed companies such as Yanjing Beer and Tsingtao Beer have shown steady performance and have not been affected by the new rules. Yanjing Beer’s stock price even hit a record high at one point. The related ETF, ChinaAMC Food & Beverage ETF (515170.SH), has also demonstrated resilience amid high market volatility.

Effective April 1, the consumption tax will be calculated using whichever is higher between the factory-gate price of the production enterprise and the external selling price of the related selling unit. Previously, the standard was based on the external selling price of the beer sales company. As for the way the tax is levied, it still follows the existing quota-based collection method—Class A beer with a factory-gate price of RMB 3,000/ton or above is taxed at RMB 250/ton, while Class B beer with a factory-gate price below RMB 3,000/ton is taxed at RMB 220/ton.

GuoTai Haitong Consumer Group leader Zhi Meng analyzed and said: The adjustment to the consumption tax calculation standard for beer may help concentrate market share among leading companies. Previously, the industry may have seen some breweries using related units to manipulate beer prices in order to qualify for the lower consumption tax rate. With the consumption tax calculation standard now normalized, this loophole is being closed, and it may help leading breweries that operate in a more compliant, long-term manner increase their share over time. In the short term, as the beer peak season is approaching and consumer conditions—especially dining demand—gradually rebound, investors are advised to watch for improvement in industry sentiment under low expectations and a low base, as well as the realization of upside potential.

From a fundamental perspective, Yanjing Beer, a leading beer company, most recently disclosed its 2025 annual performance. The company’s revenue and profits both refreshed historical records. Its net profit attributable to shareholders surged 59.06% year over year, maintaining an exceptionally high growth rate of over 50% for four consecutive years.

Zhi Meng noted: The competitive landscape in the beer industry remains stable. Against the backdrop of the recovery of dining venues, the long-term orientation for leading companies to push upward structural upgrades has not been reversed. Looking back at past periods when the CPI rebounded, the beer sector overall showed an expansion in gross sales margin spread, benefiting profitability.

Focus on the sector theme ETF—ChinaAMC Food & Beverage ETF (515170.SH). It passively tracks the CSI Sub-Sector Food & Beverage Theme Index and covers leading beer listed companies such as Tsingtao Beer, Yanjing Beer, Chongqing Beer, and Zhujiang Beer.

Daily Economic News