China: China Ressources enters race for Asahi’s stake in Tsingtao

China Ressources Beer (CRB), China's No. 1 brewer, has entered the race for the Asahi’s 19.99% stake in Tsingtao Brewery, China’s second largest beer producer. Asahi Group Holdings, which is beer market leader in Japan, bought the minority stake in Tsingtao in 2009 for about HK$5.17 billion ($667 million) from AB InBev. However, the idea to gain a foothold in the world’s largest beer market with its flagship brand Asahi Super Already Dry did not materialize. For this reason Asahi appointed Morgan Stanley in January this year to advice on the potential sale (, 29.1.2017).

In February it became known, that Danish brewer Carlsberg was eying to pick up the minority stake in Tsingtao (, 9.2.2017).

Since 2009, Tsingtao’s market value has more than doubled despite a less than encouraging performance in recent times.  If Asahi were to sell its entire stake, it could fetch nearly 200 billion yen ($1.75 billion) according to a recent report in Nikkei Asian Review.

In 2016, the Tsingtao brand, which is the number two beer brand in China, lost 7% in sales volume. In comparison China’s leading beer brand Snow from CRB lost only 3% and number three brand Yangjing 8%. Industry experts believe that also Yanjing Brewery is looking for a strategic investor (, 26.2.2017).

China’s beer market has seen three straight years of declines and only currently show slight signs of recovery. In the first six months of 2017, Tsingtao increased  sales by 2% and profit by 7% on a year-on-year basis (, 30.10.2017).

Tsingtao Brewery, based in Qingdao, a beach-lined city in China's east coast, was founded over 100 years ago when the Germans arrived and set up an Anglo-German brewery. Thus, Tsingtao is one of the oldest brands in China and is still considered a jewel in the Chinese beer market. "The secret for its long-standing popularity lies in the company's constant innovation and commitment to quality and craftsmanship," said Sun Mingbo (59), chairman of Tsingtao Brewery and a deputy to the National People's Congress in March.

Today, Tsingtao Beer is exported to over 80 countries and regions, including the USA,  France, the UK, Japan, Germany, Italy, Canada, Brazil and Mexico.

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