Stone Brewing has closed its taproom in Shanghai, China, citing pressures from tariffs and COVID-19, the coronavirus disease caused by SARS-CoV-2.
“We faced challenges over the past year with dramatically increased tariffs, and now the Coronavirus,” co-founder and executive chairman Greg Koch said in a statement. “Both factors had a significant impact on our ability to further invest in the market as planned.”
The San Diego craft beer maker announced a temporary closure of the taproom last week due to concerns over coronavirus, according to SmartShanghai. However, that temporary closure turned permanent earlier this week when the brewery announced that it is closing up its office and retail business in China.
That means the taproom on Yuyuan Lu — which originally had closed last week until March 8th — will remain closed for good. Furthermore, the brewery’s plans for expansions in Beijing and elsewhere have been scrapped.
Stone opened the 3,200 sq. ft. taproom in Shanghai’s Changning District in July 2018. It had 30 draft lines for beers from Stone’s U.S. breweries and guest brewers. Its menu offered “a contemporary twist on American cuisine,” according to a fact sheet announcing its opening.
The Shanghai taproom’s closure comes just under a year after the announcement of the sale of Stone’s Berlin, Germany brewery to Scotland-headquartered BrewDog.
The announcement came as a surprise to those who had visited the taproom in recent months. Since opening back in August 2018, Stone’s Shanghai outpost had been consistently crammed with customers on a nightly basis.
For a brand that delights in making dramatically hoppy, bitter and bold beers — flavors that are still catching on in a Chinese market that’s dominated by a mild and/or fruity palate — that’s quite an achievement. Below is the full statement from Stone, which name-checks the trade war and coronavirus as deciding factors.
Everyone at Stone, in the USA and in China, is definitely proud of our brand and all of our accomplishments. We have made an impact on the craft industry in China. And we will continue to lead with our quality beers in distribution with Top Shelf, our import partner. However with trade war tariffs heavily impacting our margins, and coronavirus impacting our retail business, and with a growing need to invest continuously in our home market of California, Stone leadership made the difficult decision to wind down our China office and retail business.
This decision is especially difficult as we have been enormously proud of our accomplishments in China, and it is not a reflection of performance (outside of the above mentioned extenuating circumstances). Our expansion has been an incredible adventure with amazing achievements to celebrate. Rather than assume that each one of our notable successes are widely known, we’re going to take a moment to celebrate them here:
- In 2019 alone, we served more than 130,000 curious and passionate craft beer fans in Shanghai.
- We earned 1,853 guest reviews on the country’s user review app dianping.com for an average of 4.85/5, which put us in the top 1% of all Western restaurants in Shanghai.
- Stone Brewing Tap Room was consistently named as a favorite beer bar in Shanghai in 2018 and 2019
- Named Best Beer Program in Asia’ by Drink Magazine Asia, Asia’s leading bar industry trade journal.
- The Tap Room was consistently profitable in each month of operations since its third month.
- Our team in China is recognized for being the best there is, and they have been committed, enthusiastic, and bleed the Stone revolutionary… in short, they’ve been everything we ever asked for. We are so very thankful for all they did to help independent American craft beer earn its place in China, which only makes the hurt around this decision sting even more sharply.
Stone operates two breweries in the U.S.: Its homebase in Escondido, California, and an East Coast brewery in Richmond, Virginia. It also operates a taproom at its Richmond facility, as well as eight other retail locations in California: two Stone Brewing World Bistro and Gardens in Escondido and San Diego, and taprooms in Napa, Pasadena, and four locations in San Diego, including at the San Diego International Airport.
The company produced 391,320 barrels in 2019, a slight decline from the 400,000 barrels produced in 2018.