Tsingtao works with Suntory in Jiangsu province and Shanghai

Tsingtao works with Suntory in Jiangsu province and Shanghai

Tough competition in the Chinese beer market may see Suntory end its partnership with Tsingtao Brewery, according to a report.

The Japanese distiller and brewer has run regional JVs with Tsingtao since 2012 but is now looking for a way out, Reuters reported today citing people familiar with the matter. A spokesperson for Suntory was quoted as saying the company was discussing "various possibilities” over the partnership.

Tsingtao entered into two joint venture agreements with Osaka-based Suntory, one involving production and the other sales. The JVs are responsible for the beer business of both firms in Shanghai and Jiangsu province. 

Anheuser-Busch InBev's proposed takeover of SABMiller is likely to increase pressure in China's beer market. A-B InBev claims to have a 57% share of the premium category in China while SABMiller operates a JV with China Resources Holdings over the country's leading beer brand by volume, Snow.