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Clubs, bars, and restaurants have been shutting in record numbers across China in the wake of the spreading coronavirus outbreak. To Western brewers who’ve tied their ambitious growth strategies to the beer-swilling habits of the Chinese, the costs are beginning to come into focus.

On Tuesday, Danish brewer Carlsberg, which markets beer under dozens of brands including Kronenbourg and Tuborg, said a segment of its China beer sales—those that typically come from the country’s many bars and restaurants—has been “significantly impacted” by the coronavirus outbreak.

Earlier, the world’s largest brewer, Anheuser-Busch InBev, was forced to close its brewery in Wuhan, the epicenter of the outbreak, which has been essentially sealed off while life elsewhere in China has been turned upside down.

AB InBev and Carlsberg join a long roll call of international companies whose businesses have been disrupted by an outbreak that has infected more than 20,000 people worldwide and killed more than 400.

Apple, Facebook, and Ford Motor Co. are among U.S. companies that have instituted employee travel bans to and from China to reduce risk of exposure to the virus, while Google is shutting down its offices in mainland China.

World’s biggest market

To Big Beer, the outbreak could have a huge significance.

China is the world’s largest beer market, bigger than the United States and Brazil—Nos. 2 and 3, respectively—combined. And it’s growing. China is so important to the big brewers that last September AB InBev listed in Hong Kong its Asia-Pacific unit in one of the biggest IPOs of the year.

Shares of Carlsberg and AB InBev are down 4.4% and 3.9%, respectively, since the coronavirus outbreak began roiling international markets in mid-January.

For Carlsberg, an extended virus-related shutdown would have a negative impact, the company acknowledged today. But, at the moment, Carlsberg chief executive Cees ’t Hart doesn’t want to make a “guesstimate.”

“The impact,” he said, “really depends on how long it lasts and how wide does it spread.”

He did describe the scene on the ground, where all nightclubs across China have been closed, as have more than half of restaurants.

Beer sales in shops and supermarkets were not as badly affected, but even there Carlsberg calculates that a “double-digit percentage” of these outlets are closed. “It impacts the whole country,” he said on a conference call with analysts after the company released annual results.

Carlsberg is the world’s third-biggest brewer. It operates a brewery in Huizhou, Guangdong, which is closed until Feb. 10, Hart said, in line with a request by authorities to extend the Lunar New Year holiday until then to help limit the risk of infection.

“We are monitoring the situation closely. The key focus currently is the safety of our employees. No infection among employees has been reported,” he said.

Beers sales going flat

Carlsberg’s 2019 results underlined the importance of the Chinese market to Western brewers at a time when many health-conscious Americans and Europeans are drinking less alcohol. On the flip side, beer faces new competitive threats from drinks like hard seltzers—alcoholic sparkling waters—and even from the legalization of the recreational use of marijuana in some U.S. states.

The big brewers are having to adapt to an increasingly complex marketplace with the growth of craft beers and a rise in demand for low-alcohol or alcohol-free drinks. Alcoholic drinks industry analyst IWSR said in December that hard seltzer is seeing a “meteoric rise” in the U.S. and predicted that sales in the U.S. will more than triple by 2023.

The Danish brewer said its revenue grew by 19% in China last year, thanks to Chinese beer drinkers going upmarket to higher-price brews and expansion from its western regional stronghold into big cities farther east.

By contrast, the volume of beer it sold in both Western and Eastern Europe was down. Globally, the company reported a 5% rise in revenue and a 24% rise in net profit in 2019.

Investors will have to wait until Feb. 12 to see if Dutch brewer Heineken reports any impact from the coronavirus outbreak and until Feb. 27 to hear from AB InBev.

In October, AB InBev, maker of Budweiser, Corona, and Stella Artois, stunned investors when it revealed weak sales in China and South Korea and lowered its profit target for the year, sending its shares down 10%.

Although the brewing giant put the Chinese weakness down to temporary factors, investors will be watching closely to see how the company performed in China in the fourth quarter and its outlook for 2020.

For the major brewers, a prolonged China hangover could sink any hope of growth this year.