Ts­ing­tao revs up on Asahi stake sale

China Daily - - BUSINESS - By ZHU WENQIAN zhuwen­qian@chi­nadaily.com.cn

Shares of Ts­ing­tao Brew­ery Co Ltd rose nearly 5 per­cent on Fri­day af­ter the beer maker con­firmed that its sec­ond­largest share­holder Asahi Group of Ja­pan was sell­ing all or part of its stake in the Chi­nese com­pany.

Shang­hai-listed Ts­ing­tao Brew­ery jumped by 4.99 per­cent to close at 32.85 yuan ($4.98), while the bench­mark Shang­hai Com­pos­ite In­dex rose 0.13 per­cent.

Cur­rently, Asahi Group holds a 19.99 per­cent stake in Ts­ing­tao Brew­ery. In a state­ment, Asahi said that it did not have any fur­ther de­tails to dis­close at the mo­ment, though in­dus­try in­sid­ers termed the move as part of the steps ini­ti­ated by the Ja­panese group to grad­u­ally with­draw from China.

In re­cent years, Asahi Group has been sell­ing sev­eral of its op­er­a­tions in China, in­clud­ing beer and other prod­ucts, and has shifted its fo­cus to Europe.

Last year, Asahi sold its sub­sidiary, Shan­dong Asahi Green Source High-tech Farm Co Ltd, to di­ver­si­fied Chi­nese con­glom­er­ate New Hope Group Co Ltd, as it failed to make prof­its from its agri­cul­tural ven­ture.

In June, Asahi sold its re­main­ing 20.4 per­cent share in Master Kong, China’s lead­ing in­stant food and bev­er­age brand, af­ter sell­ing a 10 per­cent stake in the com­pany last year, end­ing 13 years of co­op­er­a­tion be­tween the two firms.

At the same time, Asahi Group has in­vested nearly 10 bil­lion euros ($11.8 bil­lion) for ac­quir­ing sev­eral beer busi­nesses in Europe.

Zhu Dan­peng, a re­searcher at the China Brand Re­search In­sti­tute spe­cial­iz­ing in food and bev­er­age busi­ness, said the rea­sons that Asahi Group is ea­ger to sell its busi­ness in China is re­lated to Sino-Ja­panese re­la­tions and its strate­gic Euro­pean fo­cus.

“Asahi’s fo­cus is now in Europe, and it is shift­ing its main busi­ness to those prod­ucts with high gross prof­its, so there are cer­tain trade-offs for its tra­di­tional busi­ness,” he said.

“In ad­di­tion, Asahi is look­ing at a strat­egy to min­i­mize busi­ness risks. Most of the en­ter­prises it has in­vested in Europe have been at cheap prices, whereas in China, the bev­er­age and beer in­dus­try is wit­ness­ing in­tense com­pe­ti­tion.”

In Au­gust 2009, Asahi Group bought 19.99 per­cent of share of Ts­ing­tao Brew­ery from Bel­gian-Brazil­ian bev­er­age and brew­ing com­pany ABInBev for $670 mil­lion.

Though the beer in­dus­try has been wit­ness­ing a down­trend in China in re­cent years, it has started to stage a re­cov­ery since the be­gin­ning of this year, with Ts­ing­tao Brew­ery be­ing one of the bet­ter per­form­ers.

The com­pany also in­creased its mar­ket share in the high-end mar­ket in China with its prod­uct up­grades.

YU FANGPING / FOR CHINA DAILY

Work­ers up­load car­tons of beer at a Ts­ing­tao Brew­ery Co Ltd plant in Qing­dao, Shan­dong prov­ince.

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