E-Malt.com News article: USA & China: Anheuser-Busch will start pushing Harbin imports

Anheuser-Busch Cos. will introduce imports next week from its Chinese subsidiary, Harbin Brewery Group Ltd., expanding the St. Louis-based brewer's presence in USA, the fast-growing imported beer market. President and Chief Executive Patrick Stokes announced the move on February 24 at an analyst conference in Scottsdale, Ariz.

Anheuser-Busch also said the momentum of its domestic beer-volume growth appears to be carrying into 2006. A-B wholesaler shipments to U.S. retailers for the year through mid-February rose 2.9 percent versus the year-earlier period, Stokes said during a webcast of the conference. During the fourth quarter, these shipments grew 2.7 percent.

With volume growth restored, A-B has begun the process of recovering profitability through modest price increases and cutting operating costs, the company said. "In 2006, our objective is to provide a balance between volume and revenue-per-barrel growth," Stokes said.

Growing consumption of distilled spirits and wine, and stiffer competition from brewing rivals forced Anheuser-Busch to sacrifice profits last year by implementing costly marketing programs and skipping a round of fall price hikes.

Though boosting U.S. sales volume later in 2005, the measures caused A-B's net income to decline 18 percent to $1.8 billion last year, its first decline in profits since 1997.

Because of the difficulties in predicting the industry's growth, A-B has declined to provide specific earnings guidance for 2006, saying only that domestic volume and earnings per share -- excluding one-time items and taking into account stock option expenses -- will be higher than last year. In 2005, A-B posted earnings of $2.35 a share, or $2.31 a share when adjusted for these items.

The Harbin import announcement comes on the heels of Tuesday's news that A-B will become the exclusive U.S. distributor of Dutch brewer Royal Grolsch NV's import brands, starting in January.

In a news release, A-B later said it will begin distributing Harbin Lager in Los Angeles and Honolulu on Monday, and the brand will be brought to other cities later this year.

Harbin will compete with imports from Tsingtao Brewery Co., the biggest exporter of Chinese beer to the U.S. market. A-B owns a 27 percent stake in Tsingtao, but it doesn't distribute that brand to its wholesaler network.

A-B is looking to distribute more imports as a way to reap profits in this fast-growing market, while giving wholesalers a more beers.


24 February, 2006