For over a decade, Chongqing Brewery has been the centerpiece of Carlsberg’s ambitions in China. After the Danish giant took a controlling 60% stake in 2013, the once-regional player was transformed into a national powerhouse, absorbing Carlsberg’s premium international portfolio. However, the 2025 fiscal year suggests that the 'Carlsberg era' is facing its most significant headwind yet, as the company struggles to maintain its rank among China’s 'Big Five' brewers.
On the surface, Chongqing Brewery’s 2025 results appear resilient, with net profit rising 10.43% to 1.23 billion RMB. Yet, a closer inspection reveals a more sobering reality: this growth was fueled primarily by non-recurring items, specifically the resolution of a long-standing legal dispute over the 'Shancheng' brand. When stripping away these one-off gains, the company’s core operating profit actually declined by 2.78%, continuing a worrying downward trend that began in 2024.
Perhaps more damaging than the balance sheet is the shift in market hierarchy. After years of trailing, the state-owned Yanjing Brewery has successfully executed a 'secondary entrepreneurship' strategy, overtaking Chongqing Brewery in both revenue and market capitalization. This demotion to fifth place marks a symbolic blow for a company that was once touted as the most efficient and internationalized operator in the Chinese market.
In response to a saturated domestic market where total beer production fell by 1.1% in 2025, Chongqing Brewery is doubling down on a unique 'mega-bottle' strategy. Management has pinned its hopes on 1-liter premium containers, particularly for its Wusu and Carlsberg brands, designed to capture the social sharing market in retail channels. While these high-end products (priced above 8 RMB) now account for over 60% of revenue, they have yet to provide the volume necessary to offset the decline in mainstream and budget labels.
Governance concerns are also beginning to bubble to the surface among analysts. Despite the stagnation in core business growth, compensation for top executives—including President Lee Chee Kong and CFO Chin Wee Hua—saw substantial double-digit increases in 2025. This divergence between executive pay and operational performance, combined with rising sales expenses, suggests that the cost of defending market share in China’s premium segment is becoming increasingly expensive.