No small beer – Asahi's stake in Tsingtao

Japanese beverage giant Asahi has become the biggest outside shareholder in Tsingtao Beer, one of China's few internationally famous brands.

The company has bought 19.9% of the holding of Anheuser-Busch for $858m that, with its previous 7.09% stake, gives it a 26.99% of the company. The biggest shareholder is Tsingtao Beer, which owns 30.89% of the company.

Anheuser-Busch, the original American brewer of Budweiser, was itself acquired last July by Belgian company InBev, which has invested heavily in a range of Chinese provincial beers that it was promoting against Tsingtao – the country's most successful national brand – including in Shandong, the beer's home province.

China's beer sales have topped the world in volume terms in the past seven years, and analysts widely expect that half the growth in global sales will continue to come from China.

But Tsingtao, despite acquiring many smaller, local brands in the past few years and enjoying strong brand recognition, hasn't been viewed as a champion in China's investment world.

Huang Wei, beverage analyst at China Jianyin Investment Securities, said: "Tsingtao's management gives the impression of being rather dowdy."

China's breweries have diverse domestic and international owners, and the Ministry of Commerce, which polices foreign acquisitions, hasn't imposed a limit to the foreign stake in Tsingtao. Yet, in March, the ministry blocked the $3bn acquisition by The Coca-Cola Company of Chinese juice maker Huiyuan on the grounds that it blocked China's new anti-monopoly law.

Asahi, which six months ago bought Schweppes Australia for $1.2bn, entered China in 1994, and has breweries in Hangzhou, Quanzhou, Yantai and Beijing. Its market share remains tiny, selling only a 10th as much as Tsingtao in China.

Source: The Australian