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Snow-ed in: Domestic success drives Chinese beer domination

By Neil Merrett , 02-Apr-2009
Last updated the 02-Apr-2009 at 14:59 GMT

Bud Light may no longer be the world's heavyweight beer brand in terms of sales, with reports suggesting that it has lost ground to the regionally sold, China-based Snow, according to news reports.

An estimated 61 million hectolitres of Snow beer, which is brewed jointly between SABMiller and China Resources Enterprises, were sold last year helped by national demand, suggests provisional findings from researcher Plato Logic.

However, Matthew Taylor, an analyst for research group Datamonitor, told that despite Snow’s apparent demand domination, the findings would have little impact on global markets

According to the figures, the sales have allowed the brand to leap ahead of Anheuser-Busch InBev's Bud Light product, of which 55.6 million hectolitres was consumed over the same period, to become the most demanded beer, reported the Reuters news agency.

‘Exotic’ beers

Taylor suggested that although there was growing interest in markets like the UK for seemingly ‘exotic’ Asian beer brands, such as Cobra, any potential for the products remained very much niche compared to other leading brews.

On a similar level, the growing potential for beer products in the high growth market of China did not necessarily reflect guaranteed success for Europe’s largest brands in the country.

Taste in particular, was seen as one major hurdle, where even in European markets such as England or Germany, regional differences can be hard to surmount, said Taylor.

The analyst added that with Chinese beers selling at an estimated half of the price as European counterparts, profitability was also difficult to ensure.

Aside from the economics of the market, Datamonitor said that Coca-Cola’s failure to obtain regulatory permission in China to seal the acquisition of local juice group Huiyuan reflected possible tightening of entry conditions for foreign companies.

Brewer commitment

Some of the world’s biggest beverage groups have moved to play up their commitments within the Chinese market though.

In January, Carlos Brito, chief executive officer for the now merged Anheuser-Busch InBev, said that the group was strongly committed to China, which he said represented the world’ s largest beer market.

“With strong local brands such as Harbin and Sedrin and global brands such as Budweiser, we are well positioned to benefit from the significant potential in this important market,” he stated.