Brewing up ever more sales of ales

Industry consolidation

China is far from a consolidated industry where competitors can decide what to do because of too many brewers, Doukeris said.

The market is still very fragmented with more than 250 beer producers and 2,000 brewers. Beer price are also very low.

However, Doukeris noted that big cities are more consolidated than small cities and provide opportunities for high-end, high-price products.

"Smaller cities are seeing faster growth in sales. The competition is about total volume, and total size of the market," he said. While in big cities where the market is more stale, and industry players are targeting the premium sector for higher profit. "I believe with time, the brands will be everywhere," he said.

The company is building Budweiser into the most important leading brand in China's premium segment, and building Harbin, a local brand that is very popular in northeast China into a national brand in a much bigger segment the middle and high market.

In fact, not only AB InBev, but other big players are seizing opportunities during the consolidation period.

Based on Euromonitor statistics, the big four companies and others have spent a total of $1.7 billion in 18 deals for breweries in China as they scrambled to snap up local partners and build market share.

Sun Mingbo, chairman of Tsingtao Brewery, commented at a recent food safety forum held in Beijing: "The beer industry has been struggling with production capacity surplus for years but the consolidation is speeding up."

The big four make up 61 percent of the market in China. In the next phase, some big brewers may also be acquired by stronger companies, he said.

As for Tsingtao Brewery, Sun said his company regards the China market as its "major battlefield" and will focus on the domestic market by elevating its brands and acquiring other brewers.

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