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Two big beer makers start hard-fought war in Beijing
12/1/2005 11:50

A battle brewed between China's two largest beer-makers Tsingtao and Yanjing. Tsingtao has announced that it is going to start marketing its low-end beer in Beijing, the home of Yanjing, Wednesday's China Daily reported.
The low-end product of Tsingtao, which is known as Tsingtao Premium-quality Beer, will be available in Beijing in days, according to Sui Zhanping, general manager of Tsingtao Beer's north department.
Sui says it is a strategic move for Tsingtao, the country's biggest brewer, as it launched all lines of its products on the Beijing market, the base of the country's second largest brewer, Yanjing Beer.
Before the move, only the high-end Tsingtao beer was available in Beijing, on average priced at more than 10 yuan (US$1.20).
The low-end Beijing market is mostly controlled by Yanjing Beer, which has about 90 percent of the market and prices its low-end product even below 2 yuan (24 US cents). Beijing consumes 600,000 to 650,000 tons of low-end beer annually.
The high-end market, smaller than the low-end in Beijing, is shared by Yanjing, Tsingtao, Budweiser and Corona.
Sui expected Tsingtao Beer may capture about 20 percent of the low-end market by 2008.
He said he believed Beijing consumers would like to have more choices.
Moreover, Sui said that rather than selling through other distributing companies, Tsingtao has set up its own delivery team in Beijing.
The team will deliver Tsingtao beer directly to restaurants and retail stores.
A Yanjing spokesman refused to comment on the Tsingtao move.
An official from the China Brewery Industry Association said it is hard to estimate the battle result.
"Yanjing is very strong in the North China market, especially in Beijing," the official was quoted as saying.
The country's third largest beer maker China Resources has moved its marketing department for Snow Beer to Beijing. The Japanese Asahi breweries has also launched its low-end Beijing Beer on the market.
Tsingtao acquired two Beijing beer plants in 2000 and 2001. But it spent more than three years upgrading their technology.
The battle in the Beijing market will be decisive for the future development of the two beer giants, the official said.
According to Tsingtao's financial report, its production volume reached 3.13 million tons in the first three quarters last year, up 14 percent year-on-year. Sales income totaled 7.1 billion yuan (US$858 million) in the same period, up 14 percent.
The production volume of Yanjing amounted to 2.18 million tons in the first three quarters, rising nearly 29 percent. Its sales income totaled 3.85 billion yuan (US$465 million).