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New 'King' of Beers?

Sept 16, 2008 - An obscure Chinese beer is challenging Bud Light's position as the world's top-selling beer.

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Snow Beer, the product of a joint venture between London-based SABMiller PLC and China Resources Enterprise Ltd., will overtake or has already overtaken Anheuser-Busch Co.'s Bud Light in terms of consumption, depending on how the numbers are looked at.

In an article in the Wall Steeet Journal, Kevin Baker, account director for alcoholic beverages at the U.K.-based market-research firm Canadean Ltd said, "I can confirm that the Chinese brand Snow is now the largest beer brand in the world." About 1.35 billion gallons of Snow were consumed last year, compared with 48.4 million for Bud Light as a stand-alone brand, the firm says.

"I think it's inevitable in certain respects that Snow will become the largest beer brand in the world," says Paul Curran, an alcoholic-drink analyst at another research firm, Euromonitor International.

An A-B spokesman said Bud Light remains the top brand when sales of its Budweiser brand are included.

Snow's production was less than one-tenth of its current level six years ago, when the regional brewer started developing a now-extensive national distribution network and began buying competing brewers in the fragmented Chinese market. That helped it tap China's growing ranks of beer drinkers. "Success has largely been driven by the supply side," says Ari Mervis, managing director for SABMiller's Asian and African operations.

Though the Chinese drink less beer per person than Americans or Europeans, China's beer market has been the world's largest for the past six years and is growing 10% a year, according to Euromonitor. Snow's rapid growth illustrates the promise of China's vast consumer base.


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