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Brewers race for shrinking share

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THE battle for the mainland's beer drinkers is about to become more ferocious, as intense competition forces the foreign brewers to sell off their factories or enter cost-cutting partnerships with their rivals.

This year has seen several international brewers sell off large chunks of their production plants. Foster's has announced it is to sell two of its three factories (one deal is already believed to be tied up) to stem the A$42.2 million (about HK$202.16 million) losses the company has incurred on the mainland in the last year. In March, CP Group sold its stake in a joint-venture brewery in Shanghai to partner Heineken.

Sales have been poor for some years, but the losses are mounting.

'There's been a huge over-estimation of the market,' general manager of the mainland division at Heineken Hong Kong Rob Marijnen said.

Consumption is still low on the mainland, at about 15 litres per person a year, compared to 70-90 litres in Europe and the United States.

But despite yearly growth rates of more than 20 per cent from 1985 to the mid-1990s, profits have still been elusive.

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