Asahi looks for China beer exit after Tsingtao disappointment

HONG KONG/TOKYO (Jan 27): For a foreign brewer hoping to gain an edge in the Chinese market, it seemed like the ideal alliance: Japan’s largest beermaker teaming up with one of China’s premier brands. Yet, Asahi Group Holdings Ltd.’s 2009 purchase of a minority stake in Tsingtao Brewery Co. didn’t produce the opportunities the Tokyo company hoped.

Eight years later, Tsingtao still doesn’t sell Asahi’s flagship “Super Dry” lager in China. On top of that, Tsingtao now faces more competition from foreign brands and local craft beers, crimping profits.

That likely prompted Asahi to seek an exit. The Japanese company picked Morgan Stanley to advise on the potential sale of its Tsingtao minority stake, people with knowledge of the matter said this week. Asahi’s 20% holding in Tsingtao is worth about US$1.1 billion ($1.6 billion) based on the current share price, data compiled by Bloomberg show.

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