SABMiller's Chinese JV announces acquisition of 100% stake of Lanpai beer

21 July 2011

On 21st July 2011 China Resources Snow Breweries (CRSB) announced its acquisition of 100% stake of Lanpai beer, a famous beer brand in Shangqiu (city), Henan (province).

This acquisition is yet another powerful move after CRSB acquired Yuequan (Zhumadian city, Henan) in April 2010 and Aokes 3 breweries in Zhengzhou, Luohe and Anyang in January 2011.

With the geographical advantages and strategic significance of Shangqiu, the acquisition will further consolidate CRSBs existing dominant market of east Henan and leverage synergies of our operations in Northern Anhui, Northern Jiangsu and east Henan. Meanwhile, the acquisition will promote CRSBs development in the entire Henan province with our 4 manufacturing bases in Zhengzhou, Luohe, Anyang and Zhuamadian.

Lanpai Beer Company is one of the largest brewers in Henan with annual production capacity of 150,000 KL. It is located in the historic city of Shangqiu, a border city of 4 provinces Hebei, Henan, Jiangsu and Anhui. Lanpai is quite competitive with market share of about 60% in Shangqiu and its surrounding regions.

After the acquisition CRSB will have additional investment to the newly-acquired brewery mainly for its technology upgrading. Rigorous management system and quality assurance system from CRSB will be introduced to new brewery and efforts will be made for safety control, environmental protection and energy saving. At the same time CRSB will start the new brewery construction which will have annual production capacity of 200,000 KL. The annual production capacity in whole Henan will then surpass 1,000,000 ton.

Data shows that compared with 2010 CRSB has had remarkable growth in sales, market share and brand awareness.

With successful acquisition strategy, effectiveness and sustainability in business integrating and brand establishment, CRSB has made considerable progress. Our acquisitions in Henan will on one hand expand our advantages in Henan and on the other shows our determination and confidence in engaging in Henan beer market upgrading and contributing to a virtuous competition circle and sound development Wang Qun, GM of CRSB said.

CRSB has been leading China beer market since 2005. CRSBs sales volume exceeded 9,280,000 KL with growth rate of 11%. Among all brands Snow single brand sales has reached 8,413,000 KL with growth rate of 16%.