Heineken throws in the towel

In July 2011 Asia Pacific Breweries (APB) and Heineken sold their stakes in Jiangsu Dafuhao Breweries Co and Shanghai Asia Pacific Brewery Company to China Resources Snow Breweries (CR Snow), a joint venture of CR Enterprise and SABMiller.

APB said that the move was in line with its plan to go ahead with its international premium brand strategy and ensure its production capacities are streamlined in China.

But did not Australia’s Lion Nathan and Foster’s say the same thing many years ago before they packed up and left China for good?

China Resources Enterprise reported on 13 July 2011 that its joint venture with SABMiller has bought stakes in two beer makers in China from APB-Heineken for 870 million yuan (USD 134.42 million) to cement its leading position in the country.

Already in March 2011 APB-Heineken had agreed to sell its 21 percent stake in Kingway Brewery Holding to CR Snow for 1.08 billion yuan (USD 160 million). Which leaves APB-Heineken with very little to cling on to in China. Before the disposals, APB-Heineken had a market share of less than 2 percent.

China Resources Enterprise, the country’s biggest supermarket operator and top beer maker with over 70 breweries, has a 21 percent share of the beer market. In 2010, volume sales of its Snow were up 16 percent to about 84 million hl compared with the company’s total sales volume of 92.8 million hl.