SABMiller Well-Positioned in China, Analyst Says

Partnership with CR Snow is working.

SABMiller plc is “arguably the best positioned” European brewer in China thanks to its 49 percent stake in CR Snow, which has surged to become the biggest brewer by volume and revenue in the country, according to a recent report from Merrill Lynch.

Moving forward, the report said, SABMiller is focusing on brand building, particularly behind Snow, which recently became the No. 1 brand in China; driving increased regional scale; and managing price points.

The report maintained a sell rating on Tsingtao -- previously the “undisputed leader in the domestic premium beer segment” -- saying “intensifying competition is likely to require higher marketing spending to simply defend market share, let alone grow it.”

Anheuser-Busch has a minority ownership stake in Tsingtao. In 2004 it also acquired a stake in Harbin after a bidding war with SABMiller.