China Resources Enterprise, the state-backed consumer business conglomerate, said it will continue to undertake acquisitions within its core sectors of retail, beer, food and beverages. Even though the company's bottom line for the third quarter grew only 1.4 per cent from last year to about HK$1.06 billion, turnover at its core businesses rose 36.9 per cent to HK$24.45 billion. Vincent Tse, general manager of investor relations, said the small rise in third-quarter profits was caused by a sell-off in the company's non-core businesses that included a textile concern and a 10 per cent stake in Hong Kong International Terminals at the end of last year. 'The non-core business was not counted into our profits this year, hence the small rise,' Tse said. China Resources has been aiming to brand itself as China's flagship consumer business company. The company said in August it would spend up to HK$5.5 billion on acquisitions in retail, beverages and food. 'Analysts said that we wouldn't close the earnings gap after the sell-off within two years, but we did it in one year,' Tse said. Looking forward, China Resources said it would benefit from a mild inflationary environment. 'We expect China's inflation to be controllable next year,' he said. Kenny Tang Sing-hing, director of Redford Asset Management, said in the short term, China Resources might benefit from inflation, but if inflation rose too high, the company would see a drop in profit margin. The mainland is encouraging growth in consumer demand, and the company will benefit from the policy, Tang said. Driven by an improving economy and rising food prices on the mainland, the retail division's sales grew 56 per cent to HK$13.92 billion compared with last year. China Resources retail business boasts more than 3,000 stores, mostly supermarkets on the mainland. The beer division showed strong recovery in the third quarter, with a year-on-year earnings increase of 30.2 per cent to HK$526 million. An increase in production capacity and more aggressive promotions drove China Resources' national beer brand Snow up 15 per cent to 7.05 million kilolitres, accounting for more than 90 per cent of beer sales for the first nine months. The beverage business achieved growth of 44.8 per cent in year-on-year earnings in the third quarter, reaching HK$84 million. C'estbon, the company's purified water brand, saw sales volume rise about 22 per cent to 1.59 million kilolitres for the first nine months. China Resources is promoting the brand in Guangdong, Hong Kong and Macau. The food division rose 8.4 per cent year on year to HK$2.12 billion for the third quarter. The group accelerated the development of self-owned retail stores and launched 90 Ng Fung Fresh Meat counters and stores this year. 'We want to control the quality of our food, and that's why we are not using franchises,' said Tse. 'Too many are not properly run these days.'