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CR Snow’s third strike in Henan to add Shangqiu Blue Beer to its porfolio (Translation)

26 July 2011

On 21st July, 2011, China Resources Snow Breweries (China) Co., Ltd. (hereinafter referred to as "CRB") officially announces that China Resources Snow has wholly acquired Shangqiu Lanpai Brewery Ltd (hereinafter referred to as "Lanpai").

The acquisition is preceded by China Resources Snow's acquisition of Zhumadian Yuequan Brewery in April 2010, and its acquisition of Aoke Beer's three factories in Zhengzhou, Luohe and Anyang in January of this year, in another strong move to establish its layout in Henan. In about a year, CRB has launched consecutive strikes in Henan, highlighting its intention for development in the province. Through this acquisition, CRB's preliminary strategic layout in the China market is coming to light.

Industry sources believe that Shangqiu's geographical advantage and strategic significance indicates that Lanpai's acquisition and consolidation further solidifies CRB's current leading position in the eastern Henan market, and promotes CRB's contiguous operations in northern Anhui, northern Jiangsu and eastern Henan. At the same time, this ties in with the four production bases in Zhengzhou, Luohe, Anyang and Zhumadian, propelling Snow Beer's full development in the Henan market. CRB, leader of Chinese beer, has launched its agenda to enter central China, and the new drawing board in Henan beer has emerged.

Lanpai is one of the large beer producers in Henan, and is situated in the famous historical and cultural city of Shangqiu, at the junction of Henan, Shandong, Jiangsu and Anhui, with a production capacity of about 15 million litres. Its main selling brand, Let's, is Henan's well-known beer brand, with a considerable competitive advantage of nearly 60% market share in Shangqiu and the surrounding areas.

CRB stated once the acquisition has been completed, additional investment will be injected into the newly purchased plant, to be dedicated to technology upgrades and modifications. The new company will be fully introduced to CRB's strict management system and quality assurance systems, and efforts will be focused in areas such as safety and environmental protection, as well as energy-saving measures. At the same time, a new plant construction, which entails a production capacity of 20 million litres, will commence immediately, bringing CRB's Henan production capacity to 100 million tonnes.

Industry data show CRB achieved significant growth in Henan market sales, market share, brand preference and other indicators, in comparison with those in 2010. CRB, with its active, aggressive and challenging brand philosophy, once again set off huge waves in Henan.

CRB Managing Director Wang Qun stated, "With successful development strategies, effective execution of consolidation and persistent brand building, CRB has made considerable progress in development. Consecutive acquisitions in Henan Province will further promote our dominant position in the central China market. At the same time, it indicates CRB's determination and confidence to play an active part in upgrading Henan's brewery industry, creating healthy competition and sound development among Henan beer brands."

As a leader in China's beer industry, Snow Beer has been far ahead of the industry since 2005. In 2010, CRB continues to widen the gap between its competitors in beer sales. Last year, CRB's beer sales exceeded 928 million litres, at an annual increase of 11%, within which the Snow brand singly increased by 16% to 841.3 million litres, solidifying its status as a world leading beer brand.

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About China Resources Snow Breweries (China) Co., Ltd.
Established in 1994 China Resources Snow Breweries (China) Co., Ltd. is a national professional brewing company which produces and manages beer, and is headquartered in Beijing, China. Its shareholders are China Resources Enterprise, Limited and SABMiller, the world's second largest brewing group. CRB currently operates over 70 breweries in China, with Snow Beer and more than 30 regional brands in its portfolio, and has a 21% share in China's beer market. In 2010, CRB exceeded 928 million litres in beer sales, at an annual increase of 11%. The company's total production and sales capacity has been far ahead of other domestic beer brands for six consecutive years. In 2010, Snow's single-brand sales further increased by 16% to 841.3 million litres, consolidating its position a world leading beer brand.

About Snow
In 1964, at a product rating convention, packed with beer experts and authorities, a new product defeated all other longstanding Chinese beer brands to take the top prize. This beer, named after its rich, snow-white foam, and a lingering fragrant flavor, is "Snow". In 2002, CRB dedicated its efforts to package Snow Beer as a nationwide brand. Snow Beer has been widely popular with domestic consumers due to its fresh, mild flavor, and its active, aggressive, challenging and innovative brand image, and has become the favourite beer brand among the younger generation. In September 2007, the State Administration for Industry and Commerce listed Snow brand as "China's Famous Brand." In 2005, Snow Beer became the top-selling beer brand in China at a single-brand sales of 158 million litres. In 2006, Snow brand became China's fastest-growing and most valuable beer brand, valued at 11.185 billion RMB. Following its title for the highest single-product sales in 2006, Snow brand achieved a new record high in 2007 with sales of 510 million litres, winning the title of the top-selling single product in Chinese beer industry for the second consecutive time. In 2007, Snow's brand value reached 13.658 billion RMB. In 2008, Snow's single-brand sales increased by 19.1% in sales to reach 610 million litres, winning its fourth consecutive title as the top-selling national single-brand and became the top-selling beer brand worldwide, at a brand value of 15.3 billion RMB. In 2009, Snow's brand value increased to 37.726 billion RMB, and in 2010, its brand value increased by almost 10 billion to 46.368 billion RMB, ranked 29th amongst "2011 China's Most Valuable Brands".

About China Resources Enterprise, Limited
China Resources Enterprise, Limited is listed on Hong Kong Stock Exchange and is one of Hong Kong's Hang Seng Index constituent stocks. The Group focuses on consumer product business, with operations in mainland China and Hong Kong, and mainly engages in retail, beverage, food processing and distribution businesses.

About SABMiller plc
SABMiller is the world's largest brewing companies, and is listed in London and Johannesburg stock markets respectively. Its headquarters is based in London, UK. SABMiller engages in large-scale production and sales of beer and other beverages, with operations throughout the world on over six continents. SABMiller has over 100 breweries and 200 beer brands in 75 countries, with annual beer sales reaching 21.03 million tonnes. SABMiller's production management is highly regarded internationally, and is considered outstanding in its operations in emerging markets. SABMiller's brand portfolio and market share are in leading positions in many of the markets it entered. In May, 2002, SABMiller acquired United States Miller, Inc., and has since entered the world's largest beer market and profit centre.

About Shangqiu Lanpai Brewery Ltd.

[Enterprise scale]
Shangqiu Lanpai Brewery Ltd. was founded in 1981, and after three technical transformations and expansions, has a production capacity of 150,000 tonnes. Its gross assets are valued at 518 million RMB, covers an area of 550 acres, and is a dominant beer producer in Henan Province, a star enterprise in Shangqiu star enterprise, and one of Henan's key enterprises. In 1994, it was promoted to a first tier national enterprise, and was listed by the State Economic and Trade Commission as one of the "Top 10 National Beer Business" for key support.
Its main brand, Let's, is a favourite among local consumers, and has become a strong regional brand. It boasts strong sales in eastern Henan, northern Henan, southern Henan, Shandong and other regions, and maintains nearly 60% market share in the Shangqiu region.

[Geographic location]
Shangqiu Lanpai Brewery Ltd. is one of the large beer producers in Henan, and is situated in the famous historical and cultural city of Shangqiu, at the junction of Henan, Shandong, Jiangsu and Anhui. To its east is Lianyungang, and reaching west is the Eurasian Continental Bridge in Rotterdam, The Netherlands. Longhai Railway and China's longest north-to-south traffic artery, Beijing-Kowloon railway, Beijing-Zhuhai National Highway 105 and Lianyungang-Horgos 310 State Road, and Huolian Expressway all come together at Shangqiu, forming the three golden passageways through railroad, highway and expressway. It has excellent transportation and geographical advantages.

[Awards]
"Let's" is a famous trademark and well-known brand in Henan Province. It has received provincial and ministerial outstanding awards, Ministry of Light Industry Class A Product Awards, 92 Paris International Gold Award, 94 Paris International Special Gold Award, 95 National Beer Industry Quality Awards, Henan Province Product Quality Supervision and Inspection-free Title, Henan Famous Protected Brand Award, China Market Reputation Brand Award, and Chinese Light Industry Outstanding Product Award.

[Management Certification]
After 28 years of development, Shangqiu Lanpai Brewery Ltd. has established a more comprehensive enterprise quality management system. It has ISO9000 quality management system, ISO14000 environmental management system, ISO22000 food safety management system and management system certification.


This SABMiller subsidiary news release has been translated from its local market language to English language for publication on http://sabmiller.com. We have attempted to provide an accurate translation of the original material but due to the difficulties of translation slight differences may exist.

Note, the news release was first published in its local market on [21/07/2011].

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