SABMiller and its first Chinese beer maker, China Resources Breweries (CRB), will expand their marketing of CRB's flagship 'Snow' brand beer into first-tier Chinese cities, irrespective of events at Harbin Brewery. CRB competes head-on with Harbin Brewery, for which SABMiller launched a hostile takeover bid last month. SABMiller owns 29.4 per cent of Harbin Brewery, but finds itself in a fierce struggle for control after rival Anheuser-Busch surprised the industry by acquiring a 29.07 per cent stake. SABMiller owns 49 per cent of CRB, with the remainder held by China Resources Enterprise. CRB previously confined its marketing of Snow to second-tier cities. Although SABMiller had talked about bringing Snow nationwide since 2002, it was not until Anheuser-Busch bought into Harbin Brewery that it took any concrete steps. Observers earlier speculated that it would bring the Harbin brand nationwide to compete with market leader Tsingtao Brewery, which is 9.9 per cent owned by Anheuser-Busch. Whatever the outcome of the takeover bid, SABMiller would continue to use CRB to carry out its China strategy, CRB chairman Gert Goedhals said in Hong Kong yesterday. 'We ultimately want a nationwide penetration for Snow, to build it into a national brand to drive up profit margins,' he said. CRB will first step up its efforts to sell Snow beer in Beijing, Shanghai and Guangdong. China's fragmented beer market suffers from overcapacity, resulting in razor-thin margins for the nearly 500 producers competing in tightly constrained geographic markets. Only a handful of players have the resources to market their products nationwide. Mr Goedhals said regionalism would continue to characterise China's beer market, despite attempts by larger players to nationalise their products. 'I don't think China's beer market will consolidate like the North American market,' he said. 'It will be something between the highly consolidated market found in the United States and Germany's more fragmented market.' Sales of Snow beer increased 48 per cent to about 654,000 kilolitres, or 26 per cent of CRB's sales, last year. The core brand now has about 4 per cent of the national beer market. 'We aim to double the market share of Snow by the end of the decade,' Mr Goedhals said.