Budweiser aims for beer domination in China

In an effort to establish its position as the King of Beers in China, Anheuser-Busch InBev, the maker of Budweiser beer, is likely to acquire domestic Siping Ginsber Beer Group for 3.8 billion yuan ($629 million), local media said on Monday.

Experts said the move signals the ambition of Anheuser-Busch InBev to dominate a market that is expected to deliver more than 40 percent of the industry's growth over the next decade.

Located in China's northeastern Jilin province, Siping Ginsber Beer Group is one of the largest breweries in China. After the deal, Budweiser, already the No 3 brand in China in terms of market share, will have a greater competitive edge over major local brands such as Snow Beer and Tsingtao beer, insiders said.

"Anheuser-Busch InBev may pay too much for the deal, but it is a strategic move for the company, as Ginsber's daily production in one factory exceeded more than half a million tons, not to mention its advanced brewing technology and distribution channels in the market," said a former employee of Ginsber in Siping, a city in Jilin province, who asked to be anonymous.

Though it is not easy for a foreign brand to succeed globally, global brands are growing faster than their local counterparts with higher gross margins.

The Belgian company declined to comment on the report when contacted by China Daily on Monday.