Carlsberg plans giant Chinese brewery build

City A.M. Reporter
CARLSBERG is to build a giant brewery in China to tap growth in the world’s largest beer market, as the Danish group looks to expand outside sluggish European markets.

The world’s fourth-biggest brewer will sign the deal on Friday to coincide with the visit to Denmark of Chinese President Hu Jintao, and spend 4bn Danish crowns on the project in the southwest province of Yunnan.

China, which overtook the US as the world’s biggest beer market in 2003 and was nearly twice the size by 2010, is expected to grow five per cent annually in coming years, twice the growth of the global market in 2011. While Carlsberg is the biggest beermaker in western China, it lags other foreign and domestic brewing heavyweights elsewhere.

China’s four biggest brewers – China Resources Snow, Tsingtao, Anheuser-Busch InBev and Beijing Yanjing Brewery – have nearly 60 per cent of the market and are all looking for local partners to strengthen their positions.

CRS – the largest brewer and a joint venture between China Resources Enterprise and London-listed SABMiller – makes Snow, the world’s biggest beer brand.

The four big brewers are all bidding to buy most of the operations being sold by Chinese peer Kingway Brewery Holdings, worth around $700m (£450m). Carlsberg’s new brewery will start in 2014 and produce local brands as well Carlsberg and Tuborg.

“The brewery will be gradually built over a period of time to suit China’s growing demand for beer in the future,” a Carlsberg spokesman said.