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SABMiller to buy Shandong brewery

SABMILLER Plc, the world's second -- largest beer company, said its Chinese venture has agreed to buy Shandong Hupo Brewery, its fourth acquisition in the growing market in the last three weeks, Bloomberg News reported.

China Resources Snow Breweries Ltd, in which SABMiller holds a 49 percent stake, will pay US$41.7 million for the Hupo stake, boosting its capacity in China's largest beer-drinking province, London-based SAB said in a Regulatory News Service statement yesterday.

SABMiller's venture last month bought three breweries for a total of US$110 million to tap demand for beer in China, where per-capita consumption doubled in the past 10 years as consumer incomes doubled and the younger generation moved away from drinking traditional Chinese spirits. The venture's Snow beer overtook Bud Light as the globe's top-selling brew in November.

"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," Ari Mervis, managing director of SABMiller Asia, said.

Hupo, located in the eastern province of Shandong, home to Qingdao, has an annual production of 270 million liters, SABMiller said. CR Snow operates about 60 breweries in China that sold 6.9 billion liters of beer in 2007. Qingdao was the site of China's first brewery, founded in 1903 by German settlers.

The Germania Brewery, as it was originally called, went on to become China's largest, under the Tsingtao brand. Tsingtao is the largest brewer in China by sales.

CR Snow, created in 1994 with China Resources Enterprise Ltd, will own a 90-percent interest in a new venture that will run the Shandong brewery.

The company will acquire the remaining 10 percent stake within three years, SABMiller said.


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