Brewer ponders Chinese investment

Brewer Scottish & Newcastle was today considering a move to establish a foothold in the fast-growing Chinese beer market.

S&N wants to build a relationship with Chongqing Breweries, although the company has not confirmed reports that it will pay around £36m (€51m) for a 19.5% stake in the country’s third biggest brewer.

Chongqing already has a 10-year-old agreement to brew and supply McEwan’s lager to the Chinese market on behalf of S&N.

The Edinburgh-based group said it was looking to deepen this relationship and “strengthen further” the Chongqing business.

It added: “These discussions consist of several elements, including the possible injection of new assets and S&N making a minority equity investment.

“Negotiations are still ongoing and no definitive agreement has been concluded.”

An investment in China would mirror the company’s drive into other emerging beer markets, including Russia and India. It already has market leading positions in 13 European countries.

The Chinese beer market is currently growing at a rate of around 6% a year.

In October, S&N offloaded its pubs division for £2.5bn (€3.57bn) in order to focus on its international brewing operation.