After SABMiller lost a bidding war for Chinas Harbin Brewery Group to Anheuser-Busch Coso two years ago, it looked as if Americas King of Beers would reign over the Middle Kingdom as well. Anheuser-Busch, after all, had already sealed a deal with Chinas leading brewery, Tsingtao, and with Harbin in its stable it looked unbeatable.
But SABMiller had a Plan B that could well give it the throne after all. Since losing Harbin, London-ba
Both companies want to be the toast of China. As beer sales in the U.S. and Western Europe have lost their fizz, theyre growing at 8%-plus annually in China. That has helped China overtake the U.S. as the worlds top beer market.
SAB was early to see the promise of China, where it has been brewing since 1994. Yet instead of targeting big cities such as Shanghai and Beijing, as its competitors did, SABMiller scooped up breweries in less affluent areas, including the northeastern rust belt and the populous inland province of Sichuan. This contrarian strategy has allowed SABMiller to build up a national footprint at bargain prices. While Anheuser ponied up $700 million—as much as $62 per barrel of annual brewing capacity—for Harbin, SABMiller has typically paid $30-$40 per barrel for its breweries. "SABMiller has made a mint by purposely buying cheaper assets," says Bear, Stearns & Co. analyst Anthony Bucalo.
SABMiller has been smart in its positioning of the flagship Snow brand. To appeal to upwardly mobile youth, it slapped a shiny, modern label on the 50-year-old brew and launched a national ad campaign emphasizing the beers freshness, complete with sweepstakes that reward winners with outdoor vacations. The marketing push is paying off as it presses into the big cities. China now accounts for nearly 20% of SABMillers total volumes, and Snow has become Chinas No.l brand. Soon, it will probably surpass Miller Lite as the biggest seller in the companys cooler.
6. What is this article mainly about?
(A) The bidding war between SABMiller and Anheuser-Busch Cos.
(B) China has overtaken the U.S as the top beer market.
(C) How SABMiller beats Anheuser in global makets.
(D) The success of SABMiller in China.
7. What makes Snow beer one of the best-selling beers in China?
(A) The company has special technologies.
(B) Snow beer tastes better.
(C) The company has adopted an effective marketing strategy.
(D) CR Snow has purposely bought cheaper assets from SABMiller.
8. The word "affluent" in paragraph 4 can be replaced by ______.
9. Which of the following is TRUE according to the article?
(A) SABMiller is an America-ba
(B) Snow beer is now being sold all around the world.
(C) Beer sales in the U.S. and Western Europe dropped recently.
(D) Snow beer is welcomed by both youths and 50-year-olds.
10. What can be concluded from this article?
(A) Tsingdao beer is less tasty than Snow beer.
(B) Anheuser-Busch used to be the largest beer company in Europe.
(C) SABMiller spent $700 million in building new breweries.
(D) Snow beer is likely to become the biggest seller in SABMiller.