SABMiller stirs mainland beer battle with its own brew
SABMiller will introduce Miller Genuine Draft beer on the mainland next year as it refines a strategy that has emphasised the acquisition of local brands rather than the promotion of its own international brews.
A company spokesman said SABMiller would focus on the Beijing market before venturing farther afield.
The South African-based brewer has a 49 per cent stake in China Resources Brewery (CRB) and a 29.6 per cent interest in Harbin Brewery.
SABMiller recently offered $4.30 a share for Hong Kong-listed Harbin Brewery after Anheuser-Busch bought a 29 per cent stake, setting off an unprecedented takeover battle for a major mainland company.
Anheuser announced yesterday that it had completed its purchase of the 29 per cent stake, which it negotiated with a British Virgin Islands-registered shell company that had earlier acquired rights to the stake from the Harbin municipal government.
The world's largest brewer is believed to be preparing a counter-offer for Harbin Brewery.
Last week, SABMiller financial director Jonathan Kirby said the company would focus on developing CRB's Snow beer into a national brand.
That effort, combined with the promotion of Miller Genuine Draft, will put it in direct competition with Anheuser and its strategic partner, Tsingtao Brewery. Anheuser has a 9.9 per cent stake in Tsingtao.
Anheuser is rare among foreign brewers in that it makes its own Budweiser beer on the mainland and sells it nationwide, while Tsingtao has achieved national recognition in a market characterised by dominant regional brands.
'We have not yet decided whether to import [Miller Genuine Draft] or brew it locally,' the SABMiller spokesman said.
Harbin Brewery's future lies in the hands of independent shareholders, with United States investment bank JP Morgan Chase selling down its stake in the beer-maker from 9.41 per cent to 4.7 per cent over the past two weeks.
Analysts said SABMiller was eyeing the mainland consumer market's migration to medium from low-end products.
'The high-end segment, which accounts for between 10 per cent and 15 per cent of the national beer market, is growing faster than the overall market,' ING analyst Lilian Leung said. 'The foray into Beijing is interesting because the city's top-end market is still very fragmented.'
The downward trend in premium product prices and growing buying power also increased the affordability, Ms Leung said.
In contrast, the much-coveted Shanghai and Shenzhen markets are dominated by local and foreign brewers, including Budweiser, which sells well in first-tier cities at prices as low as five yuan for a 640ml bottle.
