SABMiller in China expansion

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Brewing giants SABMiller has acquired one of China's largest breweries in a $42 million joint venture that will expand its influence in one of the world's most lucrative markets.

The latest deal is a joint venture with China Resources Snow Breweries Limited (CR Snow) in conjunction with China Resources Enterprise Limited (CRE) will see SAB take full control of the Hupo Brewery in northern Shandong Province within three years.

More beer is consumed in Shandong Province than any other province in China and Zouping County serves as a transportation hub to neighbouring major cities such as Binzhou, Jinan, Zibo and Dongying.

Mr. Ari Mervis, Managing Director of SABMiller Asia, said: "SNOW continues to enjoy good growth in China and the significant import sales volume that the brand already enjoys in the province certainly justifies the establishment of a production base here. The brewery has a strategic location in northern Shandong and is well connected by highways to the other major cities in this region."

Hupo Brewery has an annual production capacity of 2.7 million hectoliters.
SAB Miller will initially own a 90% stake, rising to 100% within three years of the formation of the venture.

Some $8 million will be spent on upgrading facilities at the brewery.


Mr. Long Chen, Managing Director of China Resources Enterprise, Limited said: "The acquisition of Hupo Brewery will raise our market presence in Shandong Province which is currently the largest beer sales province of China. It is a major step for us to complete the distribution network in the coastal regions of eastern China."

 

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