SAB Miller steps up presence in China

SABMiller has acquired four breweries in China via its joint venture in the country, China Resources Snow Breweries (CR Snow), raising its production capacity in the country …

… by five million hectolitres. The deal is reported to be worth £39.3 million.

The move forms part of the company’s plans to further expand the presence of its Snow brand in the country. One of the four breweries it has acquired majority stakes in is located in the Hunan province, and CR Snow’s first in the area. Two of the plants are in the Liaoning province, while the remaining one is in Anhui.

The majority of the company’s investment will be in cash, with the remainder paid in stock. Investment will be made into improving production and distribution of the company’s four new plants as well.

SABMiller claimed last year to have overtaken Chinese market rival Tsingtao in the first six months of 2006, gaining a 14.9% share of the market, and making it the leading beer producer in the country. China’s rapidly growing beer market, currently at 300m hl, is the largest in the world. With its new capacity, CR Snow is now capable of an output of 90m hl.

The Chinese market accounts for approximately 18% of SABMiller’s overall beer volume, but under 5% in terms of profit. SABMiller, which owns a 49% stake in this Chinese joint venture, is currently the second-largest brewer worldwide, after InBev.

© db / Clinton Cawood / 29 August 2007