The new beer excise tax has limited impact on leaders and may drive more orderly industry competition

Overview

This report discusses the impact of the new excise tax calculation rules on China's beer industry. On April 1, 2026, the State Taxation Administration issued and implemented Circular No. 8 of 2026, clarifying that the applicable beer excise tax bracket will reference the higher of the ex-factory price from the producer to a related sales entity and the external price from the related sales entity to an unrelated third party. Goldman Sachs believes the tax framework itself has not changed; the main change is a stricter definition of the tax base, so the impact on covered listed beer companies should be limited.

Core views

The key views are: first, most listed beer leaders already have a large proportion of sales subject to the Tier A tax rate of Rmb250/ton, so the tax base change is unlikely to materially alter most of their tax burden; second, leaders generally have a clear separation between production and sales functions, with more standardized transfer pricing and compliance practices, making them more aligned with the new rule; third, the new tax system targets practices by some small or regional breweries that use lower external selling prices to reduce the applicable tax bracket, which may raise their effective tax burden and operating costs, thereby supporting industry consolidation and strengthening leaders' competitive position.

Analysis framework

The report uses a policy interpretation plus industry feedback approach, first comparing the changes in the criteria for determining tax brackets under the old and new rules, then assessing the differentiated impact on listed leaders versus small and regional breweries by combining feedback from covered beer companies, disclosed tax burden levels, and the industry competitive structure.

Methodology notes

• Policy impact analysisExcise tax base comparison

  Determine the applicable tax bracket using the higher price

  The new rule compares the ex-factory price from the producer to the related sales entity with the external selling price from the related sales entity to an unrelated third party, and uses the higher price as the basis for determining the applicable excise tax bracket.

• Disclosure appendix methodGS Factor Profile

  Comparison of growth, financial returns, valuation, and composite factors

  Goldman Sachs' disclosure appendix states that this framework compares individual stocks with the market and industry peers on a percentile basis using growth, financial returns, valuation multiples, and composite indicators; the main body of this report does not provide specific factor results for any stock.

• Disclosure appendix methodM&A Rank

  M&A probability score

  Goldman Sachs' disclosure appendix states that the M&A ranking measures the probability of a company becoming an acquisition target on a scale from 1 to 3; the main body of this report does not disclose the specific M&A ranking for any beer company.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Leading listed Chinese beer companies

  Potential beneficiaries

  Strengths

  A higher proportion of sales already falls under the Tier A tax rate, and production-sales separation and compliance processes are relatively standardized.

  Weaknesses

  If some products or regions still use lower tax-base arrangements, they may still face marginal tax increases.

  Comparison

  Compared with small or regional breweries, leaders better meet the pricing and compliance requirements under the new rules.

  Risks

  Policy implementation details, regional tax interpretations, and end-demand changes may affect the actual outcome.

• Small and regional beer companies

  Potentially pressured

  Strengths

  Some companies may previously have maintained competitiveness through low-price promotions or regional pricing strategies.

  Weaknesses

  If external selling prices are lower than related-party ex-factory prices, the new rule may increase the applicable tax bracket, effective tax burden, and operating costs.

  Comparison

  Compared with listed leaders, small companies may be weaker in compliance systems, pricing transparency, and cost-absorption capacity.

  Risks

  Higher tax burdens may pressure margins, force price adjustments, or lead to market share loss.

Key data

• New rule effective date2026-04-01State Taxation Administration Circular No. 8 of 2026 took effect on April 1, 2026.
• Tier A beer excise taxRmb250/tonThe report says most listed leaders already have the majority of sales taxed at this rate.
• Chongqing Brewery sales share subject to Rmb250/ton93%The report cites Chongqing Brewery as an example, saying 93% of its sales are already subject to the Rmb250/ton excise tax.
• Chongqing Brewery reported excise tax in 2025Rmb240/tonUsed to show that the actual tax burden is already close to the Tier A level.
• Tsingtao Brewery reported excise tax in 2025Rmb225/tonUsed to illustrate the tax burden level of major listed beer companies.

Impact & implications

For leading beer companies, the new rule mainly tightens compliance standards rather than restructuring the tax framework, so the near-term impact on earnings is expected to be limited. For some small and regional breweries that rely on low-price promotions or regional transfer-pricing strategies, the rule may raise tax burdens and costs, weaken price competitiveness, and shift competition in the industry from tax arbitrage toward more orderly competition on brands, channels, and efficiency.

Risks

• Actual implementation of the new rule may differ by region due to variations in local tax interpretations, company transaction structures, and product price ranges.
• If end-demand for beer remains weak, even leaders may find it difficult to fully absorb the cost impact through price increases or product mix upgrades.
• The report body does not provide a detailed calculation table, and some conclusions rely on company feedback and disclosed tax burden levels.

What to watch

• Local implementation details and audit intensity after the State Taxation Administration announcement takes effect.
• Future disclosures by listed beer companies on tax burden per ton, gross margin, and expense ratio changes.
• Whether small and regional breweries adjust ex-factory prices, external selling prices, promotional discounts, or channel structures.
• Whether industry consolidation, price competition intensity, and premiumization trends accelerate as a result.