Suntory mulls alliance with Tsingtao of China

Kyodo

Suntory Holdings Ltd. is negotiating with Tsingtao Brewery Co. to form a business alliance as the beverage maker seeks to expand sales in China, sources said Tuesday.

Tsingtao and Suntory, which currently operates in Shanghai and neighboring Jiangsu Province, are considering jointly producing beer in Shanghai and sharing distribution and sales networks, the sources said.

Suntory expects the envisioned alliance will further enhance its business in Shanghai, where the firm holds a leading 30 percent of the market, they said.

Suntory is also looking to expand its business throughout China by utilizing Tsingtao’s sales network, the sources said.

But whether Suntory can expand its alliance with Tsingtao depends on the response from rival Asahi Group Holdings Ltd., which currently has a stake of about 20 percent in the Chinese brewer, they said.

Asahi Group is now negotiating with Tsingtao to use its distribution network throughout the country.