Yanjing enjoys Olympic boon
Updated: 2008-03-17 14:27
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Yanjing is a sponsor of the upcoming Olympics. This year the brewery plans to increase its ad budget by 130 million yuan, of which the majority will be spent on Olympic marketing.[China Daily] |
Since last year, certain concerns regarding products made in China have aroused worries outside the country. These worries defined Sino-US trade relations over the past year.
China Business Weekly is partnering with Sohu.com to look at quality control within China's leading manufacturers, which are churning out Made-in-China products every day and exporting them to every corner of the world. In this issue, we take a look at beer maker Yanjing Brewery.
In 1996, after Beijing-based Yanjing Brewery Group Corp acquired its smaller crosstown rival, Huasi Brewery, the firm faced a dilemma.
After checking Huasi's beer stockpile, Yanjing found some were fermented at over 20 C, double the required temperature. After a panel of experts confirmed the beer was not up to Yanjing's quality standards, the company decided not to put it on the market.
But the move sparked opposition from many Yangjing employees, who saw abandoning 11,214 tons of beer as a big financial loss for the company, which remained a small player in China's overcrowded beer market.
Some proposed more carbon dioxide be added to the beer to produce more foam, improve taste and cover up the quality problems. After heated discussions, Yanjing still decided to dispose of the beers.
But the firm was fined by the government because the beer was not discharged in line with environmental regulations.
"If we were as aware of environmental protection at that time as we are now, we would have done a better job in properly disposing of the beer," says Li Fucheng, Yanjing's chairman.
Still, abandoning the beer was absolutely the right decision, Li insists. The move did not receive much media coverage but the regulators' decision to fine the company was widely reported.
Initially it seemed like a PR crisis, but Li found it was actually a boon that boosted consumer confidence in Yanjing's quality control.
The move has partly helped Yanjing grow into China's second largest beer maker and become a supplier to China's State banquets. Li is now even more convinced than ever that quality is a business lifeline and a major tool to compete.
Chinese authorities have adopted two quality standards for the beer industry and Li proposed all makers conform to the higher standard. The proposal was accepted by authorities, which later helped consolidate the market, washing small players out.
In February, Yanjing joined more than 30 companies, including Coca-Cola and Nestle to urge the government to unify the quality standards in the food industry. In many sectors, there are more than one standard, including a national standard, a local one and even another standard set by companies themselves, which Li says is hurting the food industry.
With China emerging as a global manufacturing base, "you need to adopt global standards to survive and compete", says Li.
