Suntory will exceed 800 million sale of Tsingtao Brewery Joint Venture

Updated: October 20, 2015  Views: 36

Suntory will exceed 800 million sale of Tsingtao Brewery Joint Venture

Zhang Zhiwei

'Trial marriage' Three years later, Tsingtao, Suntory decided not to follow along before. Although not directly say that 'personality clashes', but no more than 2 1 + 1 really is that both sides have to face reality.

October 19, Tsingtao Brewery [microblogging] (600600.SH) released a series of announcement that the company decided to acquire the investment held by Suntory Ltd. (China) two joint venture companies, 50% equity, the transaction price of 823 million yuan on. 'Beer small-scale industry staking has not stopped, the acquisition of market consolidation and development of their own advantages, the overall layout of the Tsingtao Brewery Company significant long-term. 'Tsingtao Beer regard to << First Financial Daily >> reporters responded that this It will further enhance the company's integration of operational capability.

Three years ago, the two sides see is another advantage of the resources in Shanghai and Jiangsu Province-wide domain of complementary and hope together bigger regional markets. However, rooted in Shanghai Suntory, despite the shift from autonomous joint venture business model, in the fierce competition in the market is still Win difficult. In fact, in 2014 the sale of the beverage business to Suntory Huiyuan, had intended to show its desire to fade out of the Chinese market.

Beer expert Vincent Fang even more bluntly: 'Beer is big business in the future people of the game, the children need to stay away from.' At present, including China Resources Snow, Tsingtao beer, Anheuser-Busch InBev, Yanjing Brewery (000729.SZ) and Carlsberg, including Beer five groups jointly occupied nearly 80 percent share of the beer market, not only that, a new round of oligarchic structure still further intensified, between AB InBev and SAB is the signal prior to acquisition.

Divorces

Dial back the clock to June 2012. That time, East when the number of national beer consumption in key areas, 2011 annual output accounting for 15%, of which, Shanghai and Jiangsu accounted for 6%. Based on this, the East China market is also beer companies compete for land, a mergers and acquisitions wave hit the East China forward after February 2012 won the River 苏三泰 Brewery, China Resources Snow Jiangsu Youyi 870 million yuan acquisition of 49% stake in Regal Brewery Co., Ltd., and Shanghai Asia Pacific Brewery Co., Ltd. 100% equity. August 2, China Resources Snow Lake to spend 270 million yuan to acquire 55% stake in beer, so as to realize a wholly owned.

Pressing harder and harder in the snow, entered China in 1984 and firmly occupy more than 50 percent market share in Shanghai Suntory beer sales decline to around 40 million tons in 2011 is a loss of 170 million yuan.

Crisis head, the enemy's enemy is my friend. So, Suntory hand in Tsingtao Brewery fight against CRB. June 6, 2012, Tsingtao Brewery announcement that the company and Suntory China will each goal subsidiaries in Shanghai and Jiangsu Province whole domains assets and business restructuring into two joint venture companies, including joint ventures, a business and a marketing joint venture.

Among them, the utility companies to Tsingtao Songjiang wholly owned subsidiary company as a platform, to 1.336 billion yuan by the transferee company Suntory Suntory China's Shanghai, Kunshan, Jiangsu, equity-related business company Suntory Guangming and other target companies, sales joint venture The company is Tsingtao and Suntory each in cash 10 million funded mainly responsible for bilateral matters all the beer business of marketing planning, marketing, logistics, supply and demand, marketing services and promotional advertising in the Shanghai and Jiangsu Province, the whole domain of integration, will Suntory and Tsingtao sales including beer, beverages and other products.

Two joint venture companies, Tsingtao and Suntory 50-50. At that time, analysts said, after Tsingtao and Suntory cooperation, not only can save the costs incurred competition, and both combined market share of over 40% complete have the ability to compete with snowflakes. 'no permanent friends, no permanent enemies, between competing markets in height, large enterprises competing joint is normal commercial considerations.' Chinese food business researcher Zhu Dan Peng the case said.

It is noteworthy that before the marriage Tsingtao, Suntory China's business has been badly hurt. Reporter access to information found later, in 2010, 2011 Suntory intends to enter the career goals of the joint venture subsidiaries net profit -544 million, respectively and -32 million, intends to enter the target profit subsidiary of the joint venture's sales were -1.3 million and -1.7 million.

After the joint venture, according to the latest disclosure data aspect of Tsingtao Brewery, the reporter Statistics found that: 2014 2015 January 1 to June 28 joint venture undertakings and its subsidiaries net profit was 40.83 million yuan and 11.867 million yuan, sales of the joint venture and its subsidiaries net profit was -2.2 million and -1.1 million.

Vincent Fang said this analysis, it is clear that 'the two sides did not reach the expected synergy effects.' You know, sales joint venture company and its subsidiary companies' financial statements are to be merged with the Tsingtao Brewery, therefore, for the performance of listed companies to consider, Tsingtao regard must untie this knot.

'Regional markets are important Tsingtao Shanghai and Jiangsu, the cause of the joint venture and sales joint venture subsidiary company is also an important production and management entities.' Tsingtao side said, after the acquisition of equity interest held by Suntory joint venture, the company will further enhance the integration of operational capacity, improve the overall operational efficiency of assets. joint venture company's main 'Suntory' and 'Tsingtao Beer' brands, mainly for production and marketing in certain regions in Shanghai and Jiangsu Province, with annual sales of about 2.1 billion yuan in 2014 It sold 86 million boxes (20 bottles / box).

Retreat in defeat

Suntory between the Chinese market retreat, reflects the structure of the beer industry oligopoly era: This is the big people play the game, please stay away from children.

In 1984, Suntory in Japan in Lianyungang, Jiangsu Province set up a joint venture between China Jiangsu Suntory Foods Co., Ltd., to enter the Chinese beer market. In 1996, Suntory official visit Shanghai.

Separate data showed that the current Suntory Shanghai market share of about 30%, equivalent to about half of Japan's Suntory beer all products. So, why is the heart intended to retire it?

According to foreign media reports, Suntory aspect is explained: a joint venture with the Tsingtao Brewery continued hope to achieve greater growth business in China will shift the focus to wine and wine.

Suntory's analysis should be based on several aspects of the considerations which the Chinese beer industry consumption downturn in the larger environment should be the main cause. 2014 beer industry annual total production fell 0.96%, for the past 20 years, the first negative growth. It was also in the business industry Institute data, in 2015 January to August, China's beer industry produced a total of 34,792,300 tons of beer, down 6.12%.

'Weather does affect beer consumption, 2015 rainy parts of the country, significantly reduced the number of hot weather.' In the industry view, Excellencies consumer policy have limited impact on the beer industry, because official business, government banquets rarely used beer, beer is still the main consumer of migrant workers, ordinary residents and young people, the decline in real estate investment and therefore inhibits the growth of beer sales.

Vincent Fang believes that with the domestic beer industry for nearly 80 percent share of the top five groups concentrated in the hands of the future beer industry just big people play the game, such as 'children' who Suntory, Kirin, including the need to stay away from.

'Turf decided brand strength decided charm.' Vincent Fang to << First Financial Daily >> reporter said, this is the law of the beer industry, the industry has been having such particularity. Turf battle has come to an end, small brands and Later, she wants a share of the incoming difficulty growing, then it will be home to giants.

It is noteworthy that, in 1984 to enter the Chinese market, Suntory why did not like Anheuser-Busch InBev, to seize the opportunity of China's beer market?

Who had worked in the management of Asahi Breweries analysis, said to reporters:. 'Japanese brands in production, sales and management is relatively inflexible, too dogmatic, hard to read culture on China's domestic distribution channels' in this regard , and the liquor business Shuijingfang (600729.SH) the situation is similar, the foreign management team operating in China's domestic market, there is always a gap.

Asahi Breweries was founded in 1889, officially entered the Chinese market in 1994, has invested stake in Hangzhou Xihu Beer, Quanzhou Qingyuan beer, Yantai Beer, Beijing beer by the end of April 2009, took over the Qingdao Beer Asahi beer from Anheuser-Busch InBev 19.99% stake , currently still the third largest shareholder of Tsingtao.

'After the shares of Tsingtao, Asahi Breweries strategic policy in the Chinese market has been reached, and therefore limited their brand investment.' The official said, in the face of difficult to reverse the pattern of the environment and the oligarchs, the small beer brands, including Beijing, including not enter is back, Japanese beer brand is no exception.


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