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Beer Market Sees More Consolidation
The domestic beer giants are readying for a new round of acquisitions around the country.
Peng Zuoyi, president of the Tsingdao Group, said in the next six months, his company will expand beer sales through frequent acquisitions.
He said this new round acquisitions will target the capital cities of every province.
To date, the Tsingdao Group has acquired more than 40 beer producers since it launched its acquisition strategy in 1999.
Peng said the main rival to Tsingdao and Yanjing, the Beijing-based beer giant, is Huarun Beer Group, whose market share has surged quickly.
Tsingdao and Yanjing have long held the top two positions in the domestic beer market.
Huarun, the new comer to the market, is backed by hefty capital support from Hong Kong Huarun Group and has marched into the market aggressively.
Huarun has set up companies in Sichuan, Jilin, Tianjin, Liaoning and Anhui provinces.
Last week, Huarun also announced it will increase the pace of its acquisitions and plans to purchase three beer companies located in Suzhou, which is near Shanghai.
Through the acquisitions, Huarun aims to prevail in Shanghai, where no beer producer has an absolute advantage.
China produced 22.3 million tons of beer last year. Although Tsingtao and Yanjing are well-known throughout China, their sales accounted for only 10 per cent of the country's total.
China boasts 500 beer producers.
"Phasing out the small and forming three to five conglomerates are inevitable in order to meet overseas challenges after China enters the WTO,'' said Gu Guoxian, vice-chairman of the China Brewery Association.
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