By WU Bingcong
Last week, a video of a worker peeing in the malt in a Tsingtao brewery aroused considerable public rage, so much so that the company reported the matter to the police.
Though Tsingtao responded quickly, there’s not much that can be done. Apologies and investigations are all very well but done cannot be undone.
On Monday's opening, Tsingdao stock crashed to its lowest level for more than a year. Tuesday saw further declines.
Even before the brewery staff started taking the piss, the 120-year-old brewery’s stock market performance has has been poor.
At the start of the year, Tsingdao was trading at 107 yuan, rising to 125 yuan on April 10. Thenceforth, it has continued steadily downward to below 80 yuan, continuing to decline. Its market cap is about 110 billion yuan, with 36 billion yuan lost since the beginning of the year.
In the first half of this year, Tsingtao’s sales increased by 6.5 percent, bringing in a profit of 3.4 billion yuan, 700 million more than this time last year. Sales of Tsingtao’s main product - weak beer - increased by only 2.6 percent.
To be fair, Chinese villagers have been brewing beer since as far back as 7000 BC. It’s a very well-established market and is not going to be changed much by a fancy e-marketing campaign, cooperation with a tech giant, or a new flavor of beer: Beer flavor is just fine, thanks.
Despite the obvious rigidity of taste and custom, the 120-year-old Tsingtao must try something. And what it had tried is appealing to the “high end” of the market - but the high end of the beer market is not very high. And what makes beer high-end is a long tradition of product stability (and a bigger number on the price tag), not a jazzy label and a shot of strawberry syrup. Sales of Tsingtao's mid-to-high-priced products grew by only 5 percent this year.
Of course, a huge majority of Tsingdao customers are entirely satisfied with the product they are currently receiving, at the price they pay. They have been drinking Tsingdao for their entire lives and, so long as the price and taste are fair, will probably continue for the rest.
The potential for high-end beer is said to be enormous and fiercely contested. Breweries everywhere are changing their label design and targeting younger and wealthier customers with pictures of rich people drinking beer.
Among Tsingdaos’ attempts to cultivate non-existent tastes among a disinterested public, only “white” beer - with nothing remotely innovative or Chinese about it - has been a hit.
