By Andy Young
China Resources Beer, the maker of Snow Beer the world’s best-selling beer, has reported a jump in profits, helped by an increase in average selling prices.
The performance of the beer division, however, could not prevent the brewer’s holding company from posting a massively increased loss of close to HK$ 4 billion, up from HK$161 million in 2014.
The underlying profit of the beer business rose by 14 per cent to HK$831m, although that fell short of the consensus forecast of Bloomberg analysts, who predicted a HK$933m profit.
Earlier this month, China Resources agreed to buy out SABMiller’s 49 per cent in Snow Beer, for US$1.6bn, as part of AB InBev’s proposed takeover of SABMiller. The deal ended a 22-year joint venture between China Resources and SABMiller.
The profit increase came despite China Resources experiencing a 1.3 per cent drop in sales volume in a Chinese beer market that is shrinking as part of China’s overall slowing economy.
Jason Hou, general manager of the China Resources Snow Breweries, said the company was still focus on growth in the coming years.
"We will not cut our price," Hou said. "We will focus on developing our mid- to super-premium beer products in the next few years, tracking the growth trend of this market segment in the mainland."
Chairman Chen Lang said that he expected China's beer market to follow the global consolidation trend.
"We believe that the beer market will be further consolidated over the medium term, especially at the expense of smaller regional players," Lang said.
Snow Beer recently became available in Australia and while Hou would not offer a sales target for this year he did say: "We cannot make predictions. Even if the domestic market doesn’t grow, CR Snow will still grow."