SABMiller moves ahead with Chinese expansion

By Neil Merrett

- Last updated on GMT

Related tags: People's republic of china, Sabmiller

With the acquisition of four breweries in the country, SABMiller
has signalled its intent to further expand into the Chinese
beer market.

Through its China Resources Snow Breweries joint venture, SABMiller will invest $79m (€57m) into expanding capacity in a bid to lift its dominance over local rivals, the group said Friday. A growing number of brewers are continuing to expand their presence in emerging markets like Asia, Eastern Europe and Latin America to offset the stagnant performances of their brands in other markets. Through the deal, SABMiller will acquire two breweries are in Liaoning province, a plant in Anhui and its first production site in Hunan province. The breweries will also undergo investment to bring their production and distribution capabilities in line with Snow's other plants in the country. André Parker, the group's managing director for Asia and Africa, said the purchases would improve the group's output throughout the country. "The acquisitions reflect our commitment to accelerate the national presence of 'Snow,"​ he stated. "Upon conclusion, they will add a total of about 5.0 million hectolitres to CR Snow's current production capacity of close to 90 million hectolitres." ​SABMiller already owns more than 46 breweries in 13 provinces of China, claiming last October, that its China Resources Snow venture had become the country's largest brewer by sales volume, beating domestic rival Tsingtao Brewery. The latest acquisitions come as growing number of multinationals attempt to tap the growing potential of the Chinese beer market. In March this year, US-brewer Anheuser Busch said it intended to expand its presence in the country to county-level cities in 2007 with the expansion to be completed over the next five years. At the end of 2006, Kirin, the second largest brewer in Japan, also revealed plans for Chinese expansion. It announced a US$38m (€27m) investment to gain a 25 per cent stake in Qiandaohu beer, a Hangzhou-based company.

Related topics: Markets, SABMiller

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