Blog: China sweet or sour?
Chris Brook-Carter | 4 May 2004
China may be the scene for a dramatic takeover battle for Harbin Brewery, the country’s fourth-largest beer business, between the world’s two brewing powerhouses Anheuser-Busch and SABMiller.
Speculation of a Chinese standoff between the two has been growing all day since it emerged Anheuser has taken a 29% stake in Harbin. The problem is that SABMiller already owns 29.4% itself.
The highly-aggressive move by Anheuser has set up a head-to-head battle for control of the remaining 41.6% of Harbin, run by Peter Lo, the chief executive, which is traded on the Hong Kong stock market.
The timing of the potential battle and the extent to which each company will go to secure control of Harbin will be fascinating, as many observers believe the Chinese bubble is set to burst.
China's economy has been among the world's fastest-growing for some time, but 2003 saw a fresh spurt, with gross domestic product expanding 9.1%. The massive boom has sparked fears the economy will overheat, triggering government action to restrict lending and tighten land-use rules to slow industrial developments. Indeed, last week reliable sources reported that smaller banks had been told to block new lending for a few days, despite official denials.
The well-regarded strategic planning website stratfor.com said late last week: “New lending policies in China are triggering a fundamental rethinking of the stability of the Chinese economy. This time no amount of damage control can hide the fact that the myth of the Chinese economic miracle is finally - and perhaps fatally - breaking apart.”
It continued: “There are extremely serious problems with China's economy in general - and with its banking system in particular. The only issue on the table is whether the behaviour of China's authorities reveals deep concern or outright panic. That is an interesting question - and not a trivial one - but it does not cut to the heart of the problem, which is that China, contrary to popular perception or even its extremely high economic growth rate, is in serious trouble and is desperately searching for a soft landing - a landing that might not be available.”
Whisk(e)y companies spend a lot of money and effort ageing their products for that premium taste....
PepsiCo created a stir last week with the news it is testing a product called Caleb's Kola, with some in the media claiming it was the beginning of a new “craft soda” category....
SABMiller's bid to widen the appeal of beer is very much in evidence at its latest 'House of Peroni' - with beer cocktails and a bigger bottle for the Italian lager brand on offer. ...
Here's a round-up of the big stories on just-drinks last week, featuring PepsiCo, SABMiller, the Scotch whisky category and the US wine market....
- Analysis - Remy's Cognac "dead-cat bounce"
- Comment - How Hand-Made is Tito's Handmade Vodka?
- Diageo's future brighter than present suggests
- Diageo's Q1 Results by Region
- SABMiller's troubles fuel M&A rumours
- Moët Hennessy unveils first Travel Retail outlet
- Diageo puts Beckham centre stage in Haig Club ad
- United Spirits sees Q1 net loss
- Beam Suntory, Edrington part ways in Travel Retail
- TWE unveils Penfolds range after CEO's "bold move"