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FEATUREThursday 22 October 2015
InBev-SABMiller tie-up would include China’s biggest beer
JOE McDONALD A woman sits near an advertising poster for Snow Beer in a bar in southwestern China’s Chongq- desire to make the econ-
AP Business Writer ing municipality. A potential prize for AB InBev in its bid for SABMiller is a Chinese beer, Snow, that omy more productive by
BEIJING (AP) — A potential is the world’s biggest seller. But any deal will face Chinese regulators who have barred the two promoting competition.
prize for AB InBev in its bid brewing giants in the past from cooperating. China didn’t enact its first
for SABMiller is a Chinese anti-monopoly law until
beer that is the world’s big- (Chinatopix via AP) 2007 but regulators have
gest seller. enforced it aggressively.
But any deal will face Chi- Heineken and Carlsberg, for curbs on their activities ket, according to Song In 2009, they blocked Co-
nese regulators who have Japan’s Kirin and Asahi to preserve competition. Tao, an analyst for Guotai ca-Cola Co. from buying a
barred the two brewing gi- and Chinese brands Tsing- As a condition of Chinese Jun’an International, a Chi- Chinese fruit juice maker,
ants in the past from coop- tao and Yanjing. approval for its 2008 pur- nese brokerage. Huiyuan. Regulators said
erating. In a reflection of competi- chase of Anheuser-Busch, “That may trigger an anti- even though Coke had no
China already drinks one- tive pressure, it was only InBev was barred from link- monopoly investigation,” fruit juice brand, adding
quarter of the world’s beer last year that SABMiller said ing its brands with SABMiller. said Song. “If the deal fails Huiyuan to its popular car-
and is the focus of intense it collected its first half-year Those also include domes- to get passed, InBev has to bonated drinks might hurt
foreign interest because dividend of $228 million tic beers Harbin, Sedrin and sell its holdings in CRE. competition in beverages
even with its economy from the Snow partnership. Double Deer. Then CRE will face com- overall.
cooling, demand is grow- If Belgian-based AB InBev Both also are prohibited petition from InBev, and Companies that want to
ing while Western markets wants to keep that busi- from buying any more Chi- their future will become un- merge are required to no-
are flat or declining. ness, it needs to win over nese breweries. clear.” tify regulators if their com-
SABMiller has a leading Chinese anti-monopoly A merged company would Mergers between rivals in bined annual revenue
position with a 49 percent regulators who have sin- control more than 40 per- China run counter to the would exceed 2 billion
stake in Snow, a joint ven- gled out both companies cent of China’s beer mar- ruling Communist Party’s yuan ($310 million) and
ture with a state-owned each did more than 400
partner that sold 11.8 bil- million yuan ($64 million)
lion liters (3 billion gallons) in business the previous
of suds last year, or more year, according to Song
than one out of every 20 Ying, an anti-monopoly
glasses drunk worldwide. specialist for the Anjie Law
That could dramatically Firm in Beijing.
expand InBev’s Chinese “The Ministry of Commerce
footprint, which already will consult with some of
includes Budweiser, Beck’s the main stakeholders in
and Stella Artois. this industry and maybe
“No one outside China the relevant industrial asso-
knows what Snow is, but it ciations to ensure that the
is the biggest brand in the potential merger deal will
world,” said industry ana- not put restrictions on mar-
lyst Spiros Malandrakis of ket competition or raise
Euromonitor. the barriers to entry,” said
Total Chinese beer sales Song.
are expected to rise 2.6 At the same time, brewers
percent this year to 52.2 are scrambling to adapt as
billion liters (13.6 billion gal- Chinese drinkers join their
lons), or more than double Western counterparts in
the global forecast of 1 migrating to craft beers.
percent growth, accord- Already, specialty brews in-
ing to Euromonitor. cluding Stella, Hoegaarden
Competition in China’s and Belgium’s Chimay and
crowded beer market is in- Duvel priced at up to 37
tense, which keeps prices yuan ($6) a bottle are sold
low and profits slim. in supermarkets in major
Despite that, global brew- Chinese cities.
ers are buying or launching “This highlights the speed
mass-market brands. Some of the sophistication of the
hope to attract Chinese Chinese palate,” said Mal-
drinkers who might trade andrakis of Euromonitor.
up to more expensive ver- For a global brewer, he
sions as incomes rise. said, that means taking
In China since 1984, InBev’s over a popular but low-
Anheuser-Busch unit, the profit brand such as Snow
brewer of Budweiser, has would be part of a strategy
39 beverage plants and to guide Chinese drinkers
26,000 employees. to more expensive variet-
SABMiller launched Snow ies.
with China Resources En- “Essentially the consumers
terprise, Ltd. in 1994. would drink Snow for a cou-
Today, it has 98 breweries ple of years,” he said. “And
and says it accounts for then when they move
more than one in every five into the middle class, they
cans or bottles of beer sold would switch, the com-
in China. pany hopes, to imported
Other competitors include beers from its brands.”q
