China: Anheuser-Busch in talks to buy shares in Henan Jinxing Beer Group

Anheuser-Busch Cos. Inc. is reportedly in talks to buy a stake in Henan Jinxing Beer Group, China's fourth-largest brewer, according to the Chinese newspapers 21st Century Business Herald and the Shanghai Daily News, St. Louis Business Journal posted May 21.

Several news outlets reported in October 2004 that Anheuser-Busch was considering a $1 billion stake in Jinxing Beer. Steven Burrows, president and chief executive of Anheuser-Busch's international operations, denied at the time that the two companies were engaged in talks.

State-owned Jinxing is the top brewer in Henan province with about 10 affiliates in other parts of the country, according to Agence France Press.

Flat domestic beer sales have pushed Anheuser-Busch, the nation's largest brewer, to tap into growing international markets. The company has focused much of its international investment in China.

Anheuser-Busch owns a 27 percent stake in Tsingtao Brewery Co. Ltd., the largest brewer in China and producer of the Tsingtao brand.

In 2004, Anheuser-Busch purchased 100 percent of Harbin Brewery Group Ltd., China's fifth-largest brewer with 13 breweries in northeastern China.

The St. Louis-based brewer also has a 97 percent equity interest in the Budweiser Wuhan International Brewing Co. Ltd., a joint venture that owns and operates a brewery in Wuhan that produces Budweiser for sale in China.

China has surpassed the United States as the world's largest beer market by volume, but current pricing is extremely low. Analysts agree the Chinese beer market may become a money-maker in the long term as prices rise, distribution infrastructure improves and disposable income increases among the country's growing middle class.

Anheuser-Busch's international beer volume increased 51 percent to 20.8 million barrels last year compared to 13.8 million barrels in 2004.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .