Tue, Jan 25, 2011 - Page 10 News List

Kirin Holdings of Japan and China Resources to form joint venture: report


Bottles of China Resources’ (Holdings) Snow brand beer are for sale next to Kirin Holdings brand beer at a store in Beijing yesterday.

Photo: Bloomberg
Warning: Excessive consumption of alcohol can damage your health

Japanese beverage giant Kirin Holdings will form an alliance with leading Chinese brewer China Resources (Holdings) (華潤集團) to expand in the growing Chinese market, a report said yesterday.

The two groups will form a production and sales joint venture in China, the world’s biggest beer market, accounting for a quarter of global beer consumption, Japan’s Nikkei Shimbun said.

The alliance, which the newspaper said would be officially announced soon, comes as Japanese beer and beverage producers aggressively seek opportunities to purchase or collaborate with foreign peers for further growth.

Under the alliance, Kirin would market its Ichiban Shibori and other beers made at its plants in Zhuhai and two other Chinese cities through the sales network of CR Snow (華潤雪花), a China Resources subsidiary, the Nikkei said.

CR Snow, on the other hand, will ramp up production of its Snow beer by outsourcing production to Kirin, the Nikkei said.

Chinese beer consumption grew 7.8 percent on the year to 42.19 million kiloliters in 2009 — 1.7 times that of the second-ranked US, the Nikkei said.

China is also third in terms of soft-drink consumption, trailing the US and Japan, the report said.

Kirin has struggled to expand its sales in China, where it began brewing beer in the 1990s, due to limited sales channels, the Nikkei said, while CR Snow holds a roughly 20 percent share of the Chinese beer market, eclipsing second-ranked Tsingtao Brewery Co (青島啤酒).

Kirin holds the top share in Japan’s food sector, including soft drinks and dairy products, although it trails rival Asahi Breweries in the Japanese beer market.

The alliance between the Japanese and Chinese beverage giants will follow an earlier tie-up between their rivals Asahi and Tsingtao.

Asahi also has a capital tie-up with major China-based Taiwanese food company Ting Hsin International Group (頂新集團).

Japanese beverage producers have looked to overseas markets as the domestic beer market has steadily shrunk.

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