CR Snow announces partnership with China Kweichow Moutai Distillery Co. Ltd

SABMiller plc announces that China Resources Snow Breweries Limited (“CR Snow”), its joint venture with China Resources Enterprise, Limited (“CRE”), has entered into an agreement with China Kweichow Moutai Distillery Co. Ltd to jointly invest in Guizhou Moutai Beer (‘Moutai Beer’) and form a joint venture called China Resources Snow Breweries (Junyi) Limited. As part of the transaction, CR Snow will inject RMB 270 million (approximately US$42 million) in return for a 70% equity stake in the joint venture.

With an annual production capacity of 1 million hectolitres, Moutai Beer is a popular brand with a strong competitive position in Guizhou Province. CR Snow already has a leading position in Guizhou Province, with a market share of approximately 50% and sales volume of over 1.8 million hectolitres in 2010. Since its entry into the Guizhou market in 2007, CR Snow’s sales volumes have grown at 40% per year, making Snow the most prominent brand in the province.

Ari Mervis, Chairman of CR Snow and Managing Director of SABMiller Asia, commented: “CR Snow’s partnership with Moutai further strengthens our position in this important province and further supports in building on our position as the leading brewer in the China beer market.”

Mr. Chen Lang, Chief Executive Officer of China Resources Enterprise, Limited said: “The brewing industry in Guizhou Province has been growing rapidly in recent years, with the overall sales volume in 2010 increasing by 10% year-on-year to 3.9 million hectoliters. Moutai Beer has a sound track record with potential for explosive growth. Leveraging the joint venture’s brand equity in Guizhou Province, CR Snow will immediately widen its market network, thereby generating more opportunities for Snow beer’s further development. We believe that such deep collaboration between the two leading parties will not only facilitate our strategic plans for our beer business in Guizhou Province, but will also provide a more established platform for continued sustainable growth.”