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China's 'Snow' Beer Set to Become World's No. 2 Brand

AP
Thursday, 20 Sep 2007 | 3:08 PM ET

Snow, the Chinese beer brand partly owned by London-based brewer SABMiller, is set to become the number-two beer brand in the world this year, SABMiller said Thursday, citing industry data.

Snow is the main national brand of CR Snow Breweries, SABMiller's 49 percent-owned joint venture with China Resources Group, which became the number-four brand in the world in 2006, with 3 billion liters sold, according to beverage research specialist Canadean. In the first six months of 2007, Snow sold 2.3 billion liters, up 77% on the year.

If it maintains this rate of growth, it should easily overtake Belgian beer producer InBev's Skol to become the second largest brand in the world by volume, behind Anheuser-Busch's Budweiser. It would also overtake Corona--owned by Mexico's Grupo Modelo SAB. De C.V.-- which itself is 50%-owned by Anheuser-Busch.

Even with no growth in the second half, Snow would still sell 4 billion liters, compared with second-placed Skol's 3.6 billion liters in 2006.

Thanks to SABMiller's share of the Chinese joint venture, there is also a chance SABMiller could surpass InBev as the world's largest brewer, the company said.

Snow is China's leading beer brand and accounts for nearly 50 percent of the joint venture's total sale volume.

China accounts for about 18 percent of SABMiller's total sales by volume but it contributes little to group profit. Beer has traditionally been sold at a low price in China, with retailers and wholesalers absorbing much of the profit margin, leaving very little for breweries.

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