Last week, Tsingtao announced that it would begin brewing Tsingtao beer in Thailand through a licensing partnership with Carabao. While many overseas know Carabao from its English Football League sponsorship or its energy drink portfolio, it has deep roots in beer. Carabao was founded in 2001 as a joint venture with Tawandang Brewery, operator of Bangkok's large German-style beer halls dating back to 1999. In 2023, Carabao launched a full beer portfolio under both the Carabao and Tawandang names, produced at a modern facility capable of around 400 million litres annually (roughly 3.3 million U.S. barrels for my American friends).
Why this deal is noteworthy
This appears to be one of the first major instances of a Chinese FMCG brand, let alone a beer brand, shifting production overseas under a licensed OEM model. Japanese, Korean, European, and U.S. brewers such as Sapporo, Asahi, Heineken, Miller Coors, Kirin, Diageo/Guinness, and Carlsberg have long used global contract-brewing networks. Chinese brands, by contrast, have traditionally kept manufacturing at home.
So why now? The answer likely lies in trade turbulence and strategic necessity.
1. Access to Thailand's extensive FTA network
Thailand maintains one of the broadest FTA portfolios in Asia, covering ASEAN, Japan, Korea, Australia, New Zealand, and the EFTA bloc (Norway, Switzerland, Iceland). EU–Thailand negotiations are also progressing, with an agreement expected around 2026.
Thai-made Tsingtao instantly becomes more competitive across these regions without the political volatility associated with China-origin supply.
2. Immediate entry into fast-growing ASEAN markets
Carabao's distribution network gives Tsingtao rapid access within Thailand and to Southeast Asia without relying on China-origin export channels.
3. A viable long-term strategy for the U.S. market
Tsingtao has been present in the U.S. since 1972, but Chinese-origin goods now face volatile and often prohibitive U.S. tariffs, frequently exceeding 50%.
Beer brewed in Thailand would instead fall under the U.S.–Thailand reciprocal tariff rate of roughly 19% (agreed but not yet finalised). That creates a far more manageable foundation for growth.
A potential turning point
If successful, the deal could offer Chinese FMCG brands a model for producing in a third country and reaching new markets. The commercial question is whether local production and Carabao’s distribution can improve Tsingtao’s access to target markets. That will depend on the terms of the partnership and the trade rules that apply.