CHINA: SABMiller JV to trial Miller Genuine Draft in China

By Chris Mercer | 16 January 2012

SABMillers CR Snow JV to trial Miller Genuine Draft in China

SABMiller's CR Snow JV to trial Miller Genuine Draft in China

SABMiller is to trial Miller Genuine Draft in China via its joint-venture in the country, as the world's big brewers seek to gauge Chinese consumers' demand for high-end beer.

SABMiller said today (16 January) that its Chinese JV, CR Snow Breweries, will trial Miller Genuine Draft (MGD) in the country's Zhejiang province. CR Snow is 49%-owned by SABMiller and 51%-held by China Resources Enterprise.

Up to now, CR Snow's main focus has been on expanding distribution of its namesake beer brand across China, including via acquisitions of provincial brewers. However, its trial of MGD signals a greater play for premium beer in the country.

SABMiller's MD for Asia Pacific, Ari Mervis, said: "This is an exciting opportunity to introduce one of our international brands into the fast-growing premium segment in China in a way which takes advantage of CR Snow's strong market position in the region." 

Other international brewers are also taking an interest in premium beer in China. Last year, Anheuser-Busch InBev followed up success for Budweiser in the country by expanding the availability of Stella Artois in key cities. Speaking exclusively to just-drinks, A-B InBev's CMO, Chris Burggraeve, said at the time that China's premium beer market "is growing twice as fast as the overall beer category in China".

Premium beer offers multinational brewers in China a route to better profits. CR Snow is the country's leading brewer, with a 21% volume share, but it has relatively low profit margins.

Expert analysis

Beer in China

Because of the serious social impact caused by the continuous drink-driving cases, the Chinese government amended the Road Traffic Safety Law to result in more severe punishments for drink drivers. The amended law came into effect from 1 May 2011. Drink driving is not just an illegal act but a criminal act. Drink drivers will be detained for up to six months instead of just 15 days. As a result, motorists are take drink driving more seriously and getting out of the mindset of driving after...

Sectors: Beer & cider, Emerging markets – BRIC

Companies: SABMiller, InBev

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