SABMiller, China Resources eye further beer market growth

SABMiller (SAB.LSE, SAB.JSE) and China Resources Enterprise (0291.HK), the joint venture (JV) partners behind Snow, China’s best-selling beer, will seek to boost growth through acquisitions and increased production capacity, Bloomberg reported. According to Ari Mervis, managing director of SABMiller’s Asia operations, building capacity in China remains relatively cheap. “What you find locally in China is underperforming assets,” Mervis said. “You tend to be able to acquire licenses and the stock at a relatively affordable price and rebuild at very competitive rates.” The China Resources Snow JV is also diversifying its output, increasing production of higher-margin premium beers and introducing new products such as an alcohol-free beer and a draft made from imported malt. China’s beer market grew 6.7% year-on-year to US$44.7 billion in 2009, according to Euromonitor International. Snow’s market share stands at 17% to second-placed Tsingtao’s (0168.HK, 600600.SH) 8.1%.