BUD APAC Q2 China Sales Drop Nearly 10%; Growth in South Korea and India Insufficient to Offset Profit Pressure

The recovery of the Chinese beer market has still not met BUD APAC's expectations.

On July 30, BUD APAC released its interim results for the period ended June 2026. In the first half of the year, the company achieved revenue of $3.171 billion, a year-on-year decrease of 1.4% on an organic basis;

total sales volume decreased by 2.2% to 4.2624 million kiloliters; adjusted EBITDA decreased by 8.9% to $926 million, with the profit margin narrowing by 236 basis points to 29.2%.

Operating pressure further intensified in the second quarter, with revenue decreasing by 2.1% year-on-year to $1.678 billion; sales volume decreased by 4.1%, and the EBITDA margin decreased by 229 basis points year-on-year to 27.6%.

The drag mainly came from the Chinese market.

In the second quarter, sales volume in the China region decreased by 9.7% year-on-year, revenue decreased by 8.6%, and adjusted EBITDA decreased by 15.9%, with overall performance weaker than the group average.

The company stated that the Chinese beer industry was affected by unfavorable weather and the continued slump in the on-trade channel, while BUD APAC's performance lagged behind the industry.

The on-trade channel typically includes consumption scenarios such as restaurants, bars, and nightclubs, and is also an important sales channel for premium beer. BUD APAC has long focused on premium and super-premium products as the growth priority in the Chinese market,

therefore, the slower recovery of dining and nighttime consumption has had a more direct impact on its sales volume, product mix, and profits.

The decline in sales volume has also led to operating deleverage. Fixed production, sales, and channel costs need to be borne by a lower sales volume, causing the decline in profits to exceed that of revenue. Meanwhile, BUD APAC continues to increase market investment.

In the first half of the year, the company's sales and marketing expenses increased from $524 million in the same period last year to $584 million, while other operating income decreased from $40 million to $28 million.

In the Chinese market, BUD APAC is accelerating the nationwide rollout of Budweiser Black Gold and expanding the sales scope of Corona's full-aperture canned products, attempting to cover more off-trade scenarios such as at-home consumption and instant retail.

The unit price, consumption scenarios, and channel profit structure of new channels are not entirely the same as those of on-trade channels such as bars and restaurants.

The challenge currently facing BUD APAC is not only shifting products from offline dining to retail and instant retail channels, but also maintaining premiumization and profitability levels during the channel migration process.

The weakness in the Chinese market was partially offset by South Korea and India.

In the second quarter, sales volume in the East Asia Pacific market grew by 10.1%, revenue grew by 8.5%, and normalized EBITDA grew by 26.3%. South Korea recorded low double-digit growth in sales volume, and market share continued to rise, although the growth was partly influenced by a low base.

The Indian market continued its rapid growth, with both revenue and sales volume achieving double-digit growth, mainly driven by industry expansion and premium products.

However, due to the higher proportion of the Chinese market, the growth in South Korea and India was still insufficient to reverse the overall pressure.

In the next stage, the company still needs to rely on the recovery of the Chinese market, specifically whether the recovery of the on-trade channel and the growth of O2O and off-trade channels can support premiumization and profit improvement.