AB-InBev and CR Snow to expand into southwestern China market
AB-InBev and China Resources Snow Breweries (the SABMiller joint venture) are gearing up for expansion in southwestern China’s Guangxi region, a market that has long been dominated by Yanjing and Tsingtao breweries.
For the past decade, both Yanjing Brewery, which reportedly enjoys an 85 percent market share, and Tsingtao Brewery have been competing in the Guangxi market.
That might change with the arrival of two other leading players.
AB-InBev is said to be planning a new RMB 2.7 billion (EUR 285 million) beer production base in Guangxi, which would mark a major step forward in its nationwide expansion strategy. The brewer said in May 2011 that it plans to invest several hundred million dollars in China, where it currently controls more than 35 breweries in eleven provinces.
In February, CR Snow launched an RMB 300 million (EUR 32 million) plant in Guangxi, which is expected to have an annual output of 200,000 tons upon completion in 2012.
According to SID, a local provider of market research, Yanjing Brewery had an 82.2 percent share of the market in Nanning, capital of Guangxi, in November 2010, way ahead of Tsingtao Brewery’s 12 percent and CR Snow’s 1.4 percent. AB-InBev’s share was less than 1 percent that month.
AB-InBev, Yanjing Brewery, Tsingtao Brewery and CR Snow dominate the Chinese beer market with a combined market share of 58 percent and 72.5 percent of the industry’s profits in 2010, according to a Beijing Business News report in December.
