Heineken is buying China’s biggest beer group

Heineken is buying a 40 per cent stake in the parent of China’s biggest beer group in a multibillion-dollar bet that it can challenge Budweiser maker AB InBev, the leading foreign brewer in the world’s largest beer market. The $3.1 billion investment, giving Heineken a stake in CRH (Beer) Ltd, which controls CR Beer, comes after the Dutch brewer has struggled in China. It reported volume growth of about 1 per cent in the first half of the year, compared with AB InBev’s 3 per cent. Its China business is close to break-even but still lossmaking. Heineken, which has only a 0.5 per cent share by volume of the Chinese beer market, would merge its China operations with CR Beer-owned Snow Breweries, brewer of the world’s top-selling beer by volume, Snow. AB InBev has 16 per cent of the Chinese market… Heineken will end up with an indirect 21 per cent stake in the brewer, which will gain a licence for the Heineken brand. China accounted for $83.3 billion in beer sales last year but volumes have been falling since 2014 as consumers switch to alternatives such as wine, meaning growth must come from selling higher-end brews as tastes shift towards the premium end of the market.


Tom Hancock, Alice Woodhouse and Scheherazade Daneshkhu