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Top US brewer plans more China moves

Anheuser-Busch Cos, the brewer of Budweiser and Michelob beer, may make more acquisitions in China to tap a market that's growing as much as seven times faster than the US, according to the head of the company's international operations.

"Consolidation in the market is not over. We've always said we'll continue in that process," Stephen Burrows said in a telephone interview on September 2 from Anheuser-Busch's headquarters in St. Louis.

Anheuser-Busch, the world's biggest brewer, in April tripled its stake in Tsingtao Brewery Co Ltd, China's biggest beer maker, to 27 per cent.

China's beer market will expand by as much as 5 per cent a year until 2008, compared with growth of 0.7 per cent for the US and 2.5 per cent for Europe through 2005, beverage research firm Canadean estimates.

China's 1.3 billion people each drink an average of 18 litres of beer a year, compared with as much as 80 litres each in Europe.

"Obviously we'd like them to drink as much per capita as they do in Germany," Burrows said.

Beer consumption in South Korea and Japan stands at about 35 litres per person, according to Burrows. "If it reached that, the market would double in size."

Anheuser-Busch last year beat back London-based SAB Miller to acquire Harbin Brewery Group Ltd, China's oldest and fourth-largest brewer, in a transaction valued at HK$3.5 billion (US$444 million). The American brewer first entered China in 1993, taking a minority stake in Tsingtao, and now has investments worth more than US$1.4 billion in China, according to a company statement.

Tsingtao had 12.8 per cent of the Chinese market last year.

Other drinks companies including Coca-Cola Co, the world's largest soft-drink maker, also want to tap an increase in demand in China as sales growth of its main soda brands slows in the US.

The Atlanta-based company said in July that first-half sales by volume in North American rose just 1 per cent as overall sales of carbonated soft drinks fell.

"The biggest difference from the US is that we're in a building phase," David Brooks, vice-president of Coke in China, said in an interview in Beijing.

Brooks is in charge of the company's Olympic sponsorship and marketing efforts.

The beverage maker is betting that its sponsorship of the 2008 Olympics, a deal which was extended through the 2020 Games, will help sell more Coke as well as Sprite Icy Mint, Qoo Lactic, and Bing Lu (also known as Ice Dew) drinks sold in the country.

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