China: Tsingtao to lift market share in Beijing to 40% by 2008

Tsingtao Brewery Co, China's biggest beermaker, is stepping up its push into Beijing, aiming to double its market share in the home of Beijing Yanjing Brewery Co by the time the city hosts the 2008 Olympic Games, Shanghai Daily posted June 28.

Tsingtao plans to boost market share in China's capital to 40 percent by 2008 by selling its Dayou brand beer for 1.5 yuan (19 US cents) a bottle and employing an army of 1,500 salespeople to visit bars and neighborhoods and offer drinkers one free bottle for every five bought, company spokeswoman Yuan Lu said June 27.

"Beijing is an important city with consumption of 1 million tons of beer a year," Yuan said in a phone interview from the company's base in Qingdao, eastern China. "Most people know Tsingtao but few drink the brand. We want to change it by selling low-cost beer."

Tsingtao, which is 27 percent owned by US-based Anheuser-Busch, the maker of Budweiser, is counting on Beijing to boost its volume sales in the north China region, the slowest-growing area for the company. Yanjing has about 80 percent of the market in the country's third-biggest city.

Tsingtao and Yanjing are sponsoring the 2008 Beijing Olympics when 1 million visitors are expected to flock to the city.

Tsingtao's two Beijing plants make Dayou beer for the same price offered by Yanjing, a unit of Beijing Enterprise Holdings Ltd, the Hong Kong-listed investment arm of the city government.

Tsingtao's sales rose 29 percent in its home city of Qingdao last year, while sales increased 16 percent in the southern China region, according to the company's annual report. Sales grew 14 percent in the north China area, the report shows.

The company has 50 breweries across China with a combined production capacity of 5.2 million tons of beer a year. Yanjing has 18 factories with a combined capacity of 3.5 million tons.

Tsingtao's yuan-denominated shares have gained 50 percent this year while the Shanghai Composite Index has risen 41 percent. The stock rose 3.6 percent to 12.48 yuan June 27 in Shanghai. Yanjing's local-currency shares have risen 27 percent in 2006, lagging a 52 percent gain in the Shenzhen Composite Index. The shares rose 3.4 percent to 8.58 yuan in Shenzhen.

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