AB InBev deprived of world’s most popular beer

Leuven’s AB InBev, the world’s largest brewer, will not be able to get control of the world’s best-selling beer when it takes over London-based SABMiller. Competition authorities in China have ordered Miller to divest itself of China’s Snow brand before the deal can go ahead.

SABMiller owns 49% of brewer Snow, which it is now forced to sell to joint venture partner China Resources Beer. The price has been set at €1.47 billion, roughly half the price that analysts had valued the company.

Neither of the two companies has much choice: The takeover by AB InBev of SABMiller is the fusion of two of the three biggest beer groups in the world. The deal was never going to be approved by competition authorities without substantial divestments aimed at protecting competition in the beer market. The sale of Snow may not be the last the companies are forced to accept.

AB InBev has two major brands in China already: Sedrin and Harbin. The latter was China’s official beer of World Cup 2014, as the company’s Jupiler was here. Last year it became the brand associated with China’s basketball league, at the same time as AB InBev brands Budweiser, Hoegaarden and Stella Artois made strong progress in the Chinese market.

Last year AB InBev sold 75 million hectolitres in China, with a market share of 19%, to become the third largest brand – after Snow in first place and Tsingtao in second.