Western consumer brands in China have long been coming to terms with the prospect of lower growth in the world’s second-largest economy. But demand for Heineken’s beers tells a different story.

In 2023, sales volumes for the Dutch lager maker’s various brands, including Amstel, rose more than 50 per cent. Last year, as the overall mainland China beer market shrank, its volumes increased nearly 20 per cent to just under 700mn litres — almost enough to serve a pint to everyone in the country.

Heineken’s growth comes after a deal agreed in 2018 with China Resources Beer, China’s biggest brewer, which gave the state-owned group rights to the brand on the mainland while Heineken took a stake in China Resources Beer and gets royalties from the deal.

The approach points to pockets of opportunity for well-known foreign names in China’s fast-evolving consumer sector, even if the wider markets in which they operate are saturated.

“This is a very healthy transactional relationship,” said Tristan van Strien, global investor relations director at Heineken of the relationship with China Resources Beer. “They need us and we need them.”

Heineken’s growth rates “have undoubtedly outperformed”, said Euan McLeish, an analyst at Bernstein. “None of the other premium brands have been talking about double digits.” 

China’s overall beer market is in decline. Sales fell an estimated 4 to 5 per cent last year amid concerns over consumer confidence.

But for China Resources Beer, whose sales dropped 2.5 per cent in 2024, Heineken is a pick-me-up.

Its deal with Heineken gave it rights to the Dutch beer in China for an initial 20 years, in exchange for a stake in one of its holding companies that gives Heineken an effective interest of about 21 per cent in China Resources Beer.

The lager, previously mainly sold in two southern provinces, was rolled out across the country. Growth has been rapid, helped by sponsorship of events such as the Shanghai Formula 1 grand prix in March, where 500ml servings were on sale for Rmb40 ($5.5).

A 500ml serving of Heineken in China costs an average of Rmb12-15 ($1.67-2.08), according to Morningstar, though prices vary significantly across regions and from bars to shops.

Heineken has grown by “leveraging the distribution network of China Resources Beer”, said Jacky Tsang, an analyst at Morningstar. 

China Resources Beer, whose local Snow beer is the country’s best-seller, is using Heineken to push into China’s premium market — often defined as beers that cost at least 20 per cent more than the average.

“The overall beer volume in China is on a gradual decline trend,” said Tsang, meaning China Resources had “to go after price growth to drive profit growth”.

Heineken’s growth, from a low base, contrasts with other western brands, which have also generally positioned themselves as premium options in China.

Danish brewer Carlsberg, which has about 10 per cent of China’s beer market, reported that sales edged 1 per cent lower last year. Jacob Aarup-Andersen, chief executive, said last month the market had been “structurally declining” for 15 years, but there were still “ample growth opportunities”.

Anheuser-Busch-owned Budweiser, which, unlike Heineken, has built a significant distribution network in China, has also reported declining sales.

Competition between the two “is viewed as a winner-takes-all celebrity death match in the mind of many investors”, said McLeish, in reference to the still-developing premium market.

It now takes just 37 minutes of work for the average Chinese to afford 500ml of premium beer, Bernstein estimated, compared with well over an hour a decade ago — close to a global definition of affordability.

“We think in 20-year cycles, and this is the premium development cycle that’s happening in China,” said van Strien, who added that “premium beer tends to do really well” in downturns.

“You’re not talking about a huge capital outlay for someone to have a nice sociable evening.”

For McLeish, China Resource’s strategy poses a risk to “brand positioning” if the rapid expansion has an adverse impact on price and its premium status.

China Resources Beer “does not really have experience building premium brands” but “if they had taken their time . . . the growth rates would never have been nearly as fast”, he said.

Kevin Leung, investor relations director at China Resources Beer, said there were some promotions but no “significant price drop on any Heineken product”.

There are other risks. Heineken’s exposure to China Resources Beer’s falling share price led it to take a €874mn impairment charge last year, even as its own volumes sharply increased.

The Dutch company does not disclose its dividends and royalty income from the deal, but said its share of income from China Resources Beer and its royalties from China equate to about 6 to 7 per cent of net income globally.

Van Strien said volumes grew faster than 20 per cent in the first quarter of this year, and that in the same period, volumes of its Amstel brand doubled.

The deal with China Resources had “no planned endpoint”, said van Strien. “The reality is, having a local ownership is often a good thing for us,” he said.

United States President Donald Trump doubled down on his attack on Harvard University while defending his administration’s move to block its ability to enrol international students.

Trump, in a post on Truth Social, claimed almost 31 per cent of students studying at Harvard are from foreign countries and the university administration is not forthcoming with details on these students despite repeated requests from his administration.

His fresh attack comes after a judge suspended his administration’s action.

“Why isn’t Harvard saying that almost 31% of their students are from FOREIGN LANDS, and yet those countries, some not at all friendly to the United States, pay NOTHING toward their student’s education, nor do they ever intend to. Nobody told us that!”, he wrote.

Trump added, “We want to know who those foreign students are, a reasonable request since we give Harvard BILLIONS OF DOLLARS, but Harvard isn’t exactly forthcoming. We want those names and countries. Harvard has $52,000,000, use it, and stop asking for the Federal Government to continue GRANTING money to you!”

On Friday, a US judge blocked the Trump administration from revoking Harvard University’s ability to enrol foreign students, a move that ratcheted up White House efforts to conform practices in academia to President Donald Trump’s policies.

In a complaint filed in Boston federal court earlier on Friday, Harvard called the revocation a “blatant violation” of the US Constitution and other federal laws, and had an “immediate and devastating effect” on the university and more than 7,000 visa holders.

“With the stroke of a pen, the government has sought to erase a quarter of Harvard’s student body, international students who contribute significantly to the university and its mission,” Harvard said.

Earlier, Homeland Security Secretary Kristi Noem informed Harvard that its Student and Exchange Visitor Program (SEVP) certification was “revoked effective immediately.”

“I am writing to inform you that, effective immediately, Harvard University’s Student and Exchange Visitor Program certification is revoked,” the letter read.

In a social media post she blamed Harvard for, “holding Harvard accountable for fostering violence, antisemitism, and coordinating with the Chinese Communist Party on its campus.”

The university filed a lawsuit last month against the administration over attempts to alter its curriculum, admissions procedures, and hiring policies.

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Two US credit rating agencies have become embroiled in a rare public dispute over the reliability of scores for insurance companies’ growing stash of private credit investments.

The dispute involves a study, since withdrawn by its publisher, purporting to find that small credit rating agencies assign more generous scores to private credit investments than the larger and more established ones. Kroll Bond Rating Agency has accused Fitch Ratings of misleading market participants by relying on the study to raise doubts about the quality of its ratings.

Fitch on Monday published a report critical of Kroll and other groups, based on the 2024 study, issued by the National Association of Insurance Commissioners.

A Fitch spokesperson stood by its report, arguing the insurance commissioner’s group reached similar conclusions in prior studies. “If the (association) provides new information, we will update our analysis.”

The unusually overt quarrel highlights the intense competition in the fast-growing and lucrative $1.6tn private credit industry to carve out turf — not just among lenders, but among the groups paid to referee creditworthiness of the market’s opaque investment offerings.

“There’s a build-up of risk in the insurance industry and also potentially in the collateralised loan sector that is not being properly monitored,” said Ann Rutledge, a former senior Moody’s analyst and now chief executive of rating agency CreditSpectrum. “The opacity and the risk are both attributable to the fact that there are cracks in the foundation of the current SEC-regulated credit rating industry.”

Insurers and other investors use the types of ratings in question, known as private letter ratings, when no public ratings are available. Larger ratings firms historically have eschewed issuing these types of scores for private credit products, leaving the market dominated by smaller agencies.

Private letter investments were “inherently more risky given the lack of transparency and potential ratings inflation”, analysts at JPMorgan said in a recent note, adding “there is an inherent challenge in assessing credit quality from the outside as no part of the process, analysis, or information is transparent from the outside”.

Kroll, which was among the first to challenge the establishment credit agencies with its launch after the global financial crisis, said it was troubled by its larger rival’s boosting of “statistically unsound” research. It said Fitch’s criticism appeared geared towards supporting its own grab for dominance.

“In seeking relevance to increase its market share in private credit, Fitch appears to have undercut two foundational principles for any rating agency — integrity and analytical rigour,” Kroll said in a statement.

The study by the NAIC focused on the rise of private letter ratings for insurers’ private credit investments, which totalled about $350bn at the end of 2023.

It found confidentially-issued grades from smaller rating shops were more likely to deviate from scores by the association’s own securities valuation office and were notably higher on average. According to the original report, smaller groups such as Kroll tended to offer ratings three notches higher than the association’s internal score, while larger agencies such as Fitch offered ratings about two notches higher.

The study also showed that the number of privately rated securities held by US insurers grew from 2,850 in 2019 to 8,152 in 2023, and that the share of securities rated by small credit rating providers such as Egan-Jones, Kroll and Morningstar had grown to 86 per cent in 2023.

The report also noted that Fitch is the leading provider of private letter ratings among the big three US rating agencies, ahead of S&P Global Ratings and Moody’s Ratings.

But earlier this month, the insurance association announced it was removing the report from its website “to undergo further editorial work to clarify the analysis presented”.

Without naming names, the insurance association said it would “evaluate how the information we provide to the public could be misconstrued or otherwise utilised in inappropriate ways”.

The NAIC declined a request for comment.