Tsingtao says the joint venture will improve its "competitiveness" in the regions

Tsingtao says the joint venture will improve its "competitiveness" in the regions

Tsingtao Brewery is linking up with Japanese brewer and distiller Suntory Holdings to boost its “competitiveness” in the beer markets of Shanghai and neighbouring Jiangsu province.

In a filing to the Hong Kong bourse yesterday (5 June), Tsingtao said it has entered into two joint venture agreements with Osaka-based Suntory, one involving production and the other sales. Tsingtao, which is 20%-owned by Japan's Asahi Breweries, said both companies had agreed to invest RMB10m (US$1.6m) each to establish the sales venture.

This separate company will be responsible for sales planning, logistics, promotion and advertising of the beer business of both firms in Shanghai and Jiangsu province. 

The reason for the transaction, the filing said, was to “allow both parties to complement each other in their respective resource advantages in Shanghai and Jiangsu province” and “create a synergic effect so as to improve the company's competitiveness in such areas”. 

In January, it was reported that Tsingtao was considering opening more breweries in South East Asia, to supplement growth in its native China, the world's largest beer market. 

Last year, Suntory Holdings formed a joint-venture with Garudafood Group for the development of a soft drinks business in Indonesia.