July 22, China Resources Snow Breweries Co. Ltd. (CR Snow Breweries), China’s largest brewer by production volume, has bought full ownership of Shangqiu, Henan-based Lanpai Brewery Co. Ltd., the third acquisition it made in the province since last year, indicating the giant brewer’s ambitious plan to occupy the Henan market.
This happened in less than one week after CR Snow Breweries announced plans to buy a 49% stake in Jiangsu Dafuhao Breweries Co. Ltd. and 100% shares of Shanghai Asia Pacific Brewery Co. Ltd. from Dutch brewer Heineken NV, the world’s third-largest beer group.
The Heineken assets are expected to help CR Snow Breweries entrench its position in the East China beer market, in particular Shanghai, notably China’s financial hub and one of the most popular beer consumption cities in the country.
Henan Market
This is also the third attempt by CR Snow Breweries to buy beer assets in Henan. The company acquired 3 plants from Henan Aoke Beer Industry Co. Ltd. in January and Yuequan Beer in November last year.
Industry analysts believe with Lanpai Brewery in hand, CR Snow Breweries will be able to boost its production capacity to a whole new level to rival with Henan’s biggest brewer Kingstar Beer, which has a 45% share of the Henan market and an annual output of 1.3 million tons.
Henan currently has around 40 small and medium-sized beer producers, many of which have been or are to be taken over by larger firms, Xu Hui, manager of CR Snow Breweries’ Anhui and Henan branches, said in an interview with the 21st Century Business Herald earlier this year.
CR Snow Breweries is probably seeking more acquisitions in Henan, a province seen by many major brewers as a growth market, where per capita beer consumption exceeds 20 liters annually, compared with a national level of 32 liters.
CR Snow Breweries’ acquisition of Lanpai Brewery echoes a previous statement by company general manger Wang Qun that the brewer has just started its exploitation of the Henan market.
That sends a strong message that further buyouts and market integration are expected in the central province.
Apart from CR Snow Breweries, rivals including Beijing Yanjing Brewery Co. Ltd. (000729.SZ), Tsingtao Brewery Co. Ltd. (600600.SH) and Belgium’s Anheuser-Busch InBev NV are all repeatedly making forays into Henan.
Yanjing Brewery boosted its production capacity in the province to 400,000 tons per annum after having bought a 90% stake in Henan Yueshan Brewery in August 2010.
AB-InBev, the world’s largest brewer, erected a RMB 2.7 billion-plant in Xinxiang, Henan, which upon completion will have an annual output of one million tons.
Source:21cbh.com