Asahi to sell stocks in Tsingtao beer

Tokyo-based beer company Asahi is planning to sell its 20% holdings in Tsingtao beer, eight years after it first purchased the stake in 2009.

A report by Bloomberg said the Japanese company is working with Morgan Stanley to sell its stakes valued at US$1.1 billion based on the current share price, at a time when Tsingtao faces tough challenges from foreign beer brands and shrinking profits.

China’s beer market is ailing due to the country’s economic slowdown and consumers’ changing palate towards wine, the report said.

And the country’s domestic beer brands’ profits have been squeezed by imported beers; from 2011 to 2015, China’s imported beer volume has spiked from 64,100 tonnes to 538,300 tonnes, according to a report by Chinese newspaper, Economic Daily.

The possible sale is also prompted by Asahi’s plan to boost its overseas business in Europe. The Japanese company agreed to buy SABMiller Plc brands in eastern and central Europe in December last year for €7.3 billion (£6.2 billion). It also offered to buy Peroni and other beer brands under Anheuser-Busch InBev NV in April.

Tsingtao is the second biggest domestic beer brand in China, with 15% of China’s beer market share, following behind Snow Beer (22%).