E-Malt.com News article: 2426

China: Global beer giant Interbrew, which has already spent $600 million in China buying stakes in 17 brewers, is looking for more acquisitions to boost its market share in the world's second-largest beer market, company chairman Pierre Jean Everaert said, according to Xinhua Financial News press release from March 26. "We are ready to invest more in local brewers with good brand reputation and growth potential," Everaert told AFX-Asia in an interview on the sidelines of a news conference in Beijing.

However, he would not give any details about ongoing talks with local companies. He said Interbrew, which is currently in third place in terms of market share in China, is aiming to take the first or second spot within five years, overtaking Tsingtao Brewery Co. Ltd. and Beijing Yanjing Brewery Co. Ltd. "We want to be in the number one or number two position within five years," Everaert said.

Since 1985, Interbrew has been expanding steadily in the country via alliances with local partners. The firm's latest acquisition here -- a 50 percent interest in Malaysian Lion Group's beer business in China -- completed in January, pushed it up into the number three position in the domestic beer market with a 9 percent share, against Tsingtao's around 13 percent share and Yanjing's 10 percent.

Interbrew now operates 17 brewery units nationwide, including Nanjing Breweries, KK Breweries, Zhujiang Brewery, with combined sales hovering around 21 million hectoliters per annum. The firm has invested around $600 million usd in the country so far, accounting for 11-12 percent of its overall global investments, said Everaert.

Interbrew holds a majority stake in all its mainland units, except Zhujiang Brewery, in which it holds 24 %. Zhujiang Bowery, which has an 80 percent share of the market in Guangzhou, is awaiting regulatory approval for a stock market listing in China this year, he said.

Having been badly burned in China in the early 1990s, foreign brewers have returned to China with enthusiasm over the past two years. SABMiller, Anheuser-Busch, Scottish & Newcastle Plc and Carlsberg AS have all been active in the country, tying up with local brewers as they see huge potential in the market where annual per capital beer consumption is just 19 liters, compared with 75 liters in Europe and 84 in the US.

In the latest deal, announced today, Lanzhou Huanghe Enterprise Co Ltd., a local brewery company in northwest China's Gansu province, said it has signed a letter of intent with Carlsberg to set up a 280 million yuan 50/50 joint venture in Gansu. "The market will keep growing, and we want to contribute as much as we can to stimulate that growth," Everaert said.


31 March, 2004