For those who have been to any bar or pub in China, Tsingtao Beer is always on the menu. Now facing growing domestic competition, the number-one Chinese beer has been forced to acquire smaller brands to maintain its place in the market.
As the summer comes, nothing sells better than a cold beer.
China's number one drink, Tsingtao beer has to face growing competition from Snow Beer, and Baotuquan Beer.
Tsingtao decided that the best way to win the beverage battle was to acquire them. On Saturday, it bought the smaller brand Baotuquan Beer for 250-million yuan.
The move will at least safeguard its market status in Shandong province, the giant's home turf.
Miao Xizhe, Associate Professor of Ocean University of China said "The acquisition didn't appear to be a very necessary one, but in fact, it can stop other brands, like Snow Beer, from seizing more market share in Shandong Province. After all, Shandong is the hometown of Tsingtao Beer and its most profitable market."
Tsingtao Beer is dual-listed in Hong Kong and the mainland stock exchanges. Analysts say the news will very likely drive up share prices, and those who did not buy in before the acquisition will have to wait until the price settles back down.
(CCTV June 8, 2009)
