China: Mexico's Modelo faces problems with the pirating of Corona Brand in China

Mexican brewer Grupo Modelo faces a problem with the pirating of its Corona brand in China at a time when the company is working to boost the presence in that market of its most popular export brand, a top company official said, according to Dow Jones, June 14.

Modelo chairman and chief executive Carlos Fernandez told reporters that Modelo, as well as Mexican and Chinese authorities, are working to resolve the matter, "however, the problem is a big one."

He said it was difficult to quantify possible losses to Modelo, which sold 1.5 million crates of Corona in China last year. "Because they're pirate products; we don't know how much is distributed."

A Chinese beer called "Cerono" is sold in the same shape bottle as Corona, and the label is almost identical, except that the brewer is identified as Beijing Cerono Trade Limited Company instead of Cerveceria Modelo.

Fernandez said the company is conducting advertising campaigns in China to encourage people to read the label to make sure they're getting the Mexican beer.

Modelo began expanding the presence of Corona in China this year under an agreement with U.S. partner Anheuser-Busch (BUD), and Fernandez said that agreement is going well. Modelo also began importing China's Tsingtao beer into Mexico this year.

Chinese Commerce Minister Bo Xilai visited Mexico last month to discuss a number of trade issues with Mexican officials. The Economy Ministry said Mexico had expressed concern among local authorities and producers about the violation of intellectual property rights, but didn't mention any specific cases.

Modelo, Mexico's largest brewer that is 50% owned by Anheuser-Busch, sold 49.3 million hectoliters of beer in 2006, of which 15.9 million hectoliters or 32.2% was in exports.

Fernandez said Modelo is preparing to introduce other brands into some Chinese markets, but declined to say which brands.

The Chinese market for imported beers "is growing but it's still a small market, and obviously in time we hope it will be a relevant market," he added.

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