Abstract:This paper studies the correlation between market structure and market performance of Chinese beer industry based on the market power theory and efficiency structure hypothesis. The result shows that this industry's market performance is affected by operational efficiency and market structure, and there is also correlation between operational efficiency and market structure. Further conclusion could be made that the improvement of Chinese beer industry's market performance is due to increasing operational efficiency. What's more, market concentration, which is positively related to market performance, is inseparable from greenfield and acquisition in recent 20 years. Based on the above discussion, it can be concluded that capital and management advantage is the core competence of oligopoly market. And also, taking the beer industry's market features into consideration, this paper gives some policy suggestions, for example, improving management standard, strengthening antitrust and strategic collaboration review on mergers and acquisitions, providing more reasonable support on domestic companies and improving beer industry security, which will have positive effect on Chinese beer industry.