China: Kirin acquires 25% stake in Hangzhou Qiandaohu to supply beer to Shanghai

Kirin Brewery Co. has secured a production base in eastern China by purchasing a 25 percent stake in local brewer Hangzhou Qiandaohu Beer Co. and will begin supplying the major market of Shanghai as soon as May, Asia Pulse reported March 5.

The move is part of Kirin's attempts to fortify output and sales in the world's largest beer market by teaming up with local counterparts.

Japan's Kirin spent 305.18 million yuan (US$39.4 million), on the deal, which the companies officially announced on Friday.

On top of its own lineup, Hanghzou Qiandaohu will also make Kirin's beers.

Kirin currently has breweries in the northern province of Liaoning as well as in the south's Guangdong Province.

Australian-New Zealand brewer Lion Nathan had been making Kirin beers in Jiangsu Province and supplying them in eastern China under a licensing agreement. But following Lion Nathan's decision in 2004 to withdraw from the market, Kirin has been supplying eastern China from its Guangdong Province plant.

"We're closer to Shanghai, which is a major market," Kirin Chairman Koichiro Aramaki told reporters. "China is extremely large, so proximity to the market is important. This investment will be a breakthrough for us." Aramaki also hinted the firm may enlist the local brewer's help with production technology and market research.