BUD APAC's premium beer strategy appears to be faltering six years after its IPO, with performance metrics declining across key markets.

The company reported a 6.0% decrease in total volume for the 2025 fiscal year. Revenue reached USD 5.764 billion (approximately RMB 39.829 billion), representing a 6.1% year-on-year decline, or a 7.7% decrease on a reported basis. Revenue per hectoliter dipped by 0.2%.

Normalized profit attributable to equity shareholders of BUD APAC fell from USD 778 million (approximately RMB 5.376 billion) in fiscal 2024 to USD 666 million (approximately RMB 4.602 billion) in fiscal 2025. The board proposed a final dividend of 5.66 US cents (approximately RMB 0.39) per share for the year ended December 31, 2025.

A significant point of concern is the performance in China, where beer volume dropped by 8.6% in 2025. Revenue in the region saw a substantial decline of 11.3%, with revenue per hectoliter decreasing by 3.0%.

To understand the company's challenges, one must examine the influence of its parent company, Anheuser-Busch InBev, and its major shareholder, 3G Capital. 3G Capital's core strategy has historically been aggressive: achieve market dominance through acquisitions and then maximize profits through rigorous cost-cutting, known as "zero-based budgeting" (ZBB).

This management philosophy enabled BUD APAC to maintain the industry's highest EBITDA margin (consistently above 30%) over the past decade. However, it also sowed the seeds for current difficulties. In an effort to protect profitability metrics, the company's marketing initiatives have become increasingly short-sighted, prioritizing immediate sales conversions. This has led the brand to evolve from a "lifestyle" identity toward a mere "efficient FMCG symbol."

More damaging has been the "optimization" of talent. In 2024, BUD APAC reduced its workforce by approximately 4,000 employees, or 16% of its total. Despite company denials, widespread reports in 2025 suggested plans for further layoffs to cut operational costs by an additional 15%.

Significant cost-cutting has directly weakened BUD APAC's keen insight into the local Chinese market and its ability to mobilize sales channels. As experienced sales personnel were replaced by the BEES digital system, the company gradually lost its dominance over traditional Chinese retail outlets, restaurants, and nightlife venues.

BUD APAC once possessed a formidable moat in China: absolute monopoly over the on-premise channel, particularly high-end bars and nightclubs. However, by 2025, this advantage was eroding. Macroeconomic headwinds made expensive nightlife less essential, with younger consumers shifting away from high-cost clubs towards "home drinking" or more affordable craft beer bars.

The financial report confirmed this trend: due to poor channel inventory management and slow sell-through, BUD APAC was forced to offer higher retail discounts in the third quarter to maintain volume, which directly lowered the average selling price.

While BUD APAC struggled with "channel mismatch," its competitors were gaining ground. The partnership between Heineken and China Resources Beer has become a major headache for BUD APAC in the Chinese premium market. Leveraging its extensive local distribution network, China Resources has pushed Heineken into the mid-to-high-end餐饮 channels once dominated by BUD APAC. Heineken's 2025 fiscal data showed "excellent growth" in China, with volumes continuing to achieve double-digit increases.

This "local giant + international brand" model has proven more resilient than BUD APAC's elite model, which relies heavily on direct operations and intensive management. BUD APAC's large direct-sales system exhibited significant inertia and resistance when market demand shifted abruptly.

Facing the failure of its management logic, BUD APAC underwent a significant leadership transition in 2025. On April 1, 2025, CEO Jan Craps, who had helmed the company for seven years, stepped down. Craps, a typical McKinsey and 3G Capital-style executive skilled in presentations, capital operations, and margin management, presided over the company's IPO. However, he left his successor with a company that had been squeezed dry of excess and was experiencing a cliff-like drop in volume.

His replacement was YJ Cheng, a 29-year company veteran with a background in engineering and fermentation, formerly the Chief Global Supply Officer. The appointment of a leader with frontline production experience signaled to the market that BUD APAC was attempting to return to its "core fundamentals."

Compared to his predecessor's grand global visions, Cheng's task resembles a repair operation in difficult terrain: resolving supply chain redundancies, mending distributor relationships damaged by extreme cost control, and regaining the brand's appeal among young Chinese consumers.

His position is particularly challenging. On one hand, besides the CEO change, CFO Ignacio Lares is also set to depart in April 2026. Frequent management shake-ups often lead to discontinuities in strategy execution. On the other hand, BUD APAC's Harbin Beer brand was found to contain "vomitoxin" in 2024. Although the levels complied with local standards, the reputational damage was nearly disastrous for a brand portfolio positioned as "premium and high-quality." This was not just a public relations crisis but a "backlash" resulting from the pursuit of extreme KPIs and cost compression in testing and production.

In an effort to reverse the decline, BUD APAC is pinning its hopes on the BEES platform. As of September 2025, this B2B digital platform covered over 320 cities in China and contributed approximately 80% of revenue. While management describes BEES as using AI and algorithms to optimize ordering, in practice, it has also become a tool for BUD APAC to further strip distributors of autonomy and strengthen central control.

In China's beverage market, distributor loyalty is typically built on long-term personal relationships, flexible payment terms, and shared profits. As these elements are replaced by cold algorithms and profit margins are made more transparent and squeezed by data, a "hidden backlash" within the channels is emerging.

The last line of support for BUD APAC's stock price appears to be its dividend. Despite the performance slump, the company maintained a high payout level, with a proposed final dividend of approximately RMB 0.41 per share for fiscal 2025. While this strategy of stabilizing investors through dividends may be effective in the short term, it resembles a form of "slow-motion suicide" that mortgages the future in the absence of endogenous growth drivers.

By February 2026, BUD APAC's price-to-earnings ratio had fallen from its post-IPO premium levels to around 23 times, even as competitors' results generally remained robust.

For YJ Cheng, he has inherited not just a company in decline, but an outdated management system. If BUD APAC cannot shift its priority from "efficiency first" to "consumer connection first," the cold winter of the 2025 financial report may be just the beginning.