11May2001 CHINA: CHINESE BEVERAGES LESS POPULAR THAN FOREIGN BRANDS - SURVEY.
BEIJING, May 11, Asia Pulse - Chinese brand soft drinks have a significantly less favourable image than foreign brands on the market, according to a survey of 1,925 people in six Chinese cities.
The survey asked consumers in Beijing, Shanghai, Guangzhou, Wuhan, Shenyang and Xi'an to rate 23 different brands of soft drink.
A comprehensive comparison shows that Coca Cola, Pepsi Cola and Sprite are dominating the markets in either brand value or consumer opinion. Other brands, such as Fanta, Nongfu Mountain Spring, Kangshifu, Guangming, Lulu, Wahaha, Jianlibao, Yeshu, Minolta and Robust, also hold some market share.
The survey found that people feel differently about different brands of soft drinks. Coca Cola, as one of the earliest brands entering into China, has won full approval of the people for its long history, colorful background, peculiar characteristics and dominating social image, and so has Pepsi Cola.
Jianlibao, Dole, Xurisheng and Nestles also have certain degree of approval of consumers. As for the extension of brand value, Coca Cola, Pepsi Cola and Sprite have a far-reaching influence.
(c) 2001 Asia Pulse Pte Limited
11May2001 USA: MARKET - ASIA PACIFIC - CONSUMER MARKET INSIGHTS - CHINESE DAIRY PLAYERS TIE UP FARMERS.
Foreign dairy producers, including France's Danone, Switzerland's Nestle, Italy's Parmalat, and Kraft of the U.S., are all now heavily involved in the Chinese market. But, reports China Daily Business Weekly, their weakness is that these companies have too few direct contacts with China's milk producers, while domestic companies have strong ties to local government and milk production groups to ensure increasing supplies. For example, the Inner Mongolia-based Yili Group has established direct milk supplies in that autonomous region and in provincial areas around Beijing to tap direct supplies from farms.
The newspaper said this is not something the foreign companies can rectify overnight. It takes three years from establishing a farm and assembling a herd before milk production reaches its full capacity.
Moreover, many provinces simply will not allow foreign companies to buy or lease farmland. The growing demand for milk is such that prices paid to farmers in Inner Mongolia have risen over a year the equivalent of one U.S. cent a kilogram, or about four percent.
SOURCES: China Daily Business Weekly, Beijing (6 March 2001)
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Sources: ASIA INTELLIGENCE WIRE , MARKET NEWSLETTER: ASIA PACIFIC 05/2001
14May2001 CHINA: China Resources brews up strong beer arm.
by Beijing Mark O'Neill in Beijing.
A unit of Hong Kong-based China Resources Group has, through a process of rapid acquisition, become the third-largest beer producer in China and plans to continue this expansion strategy.
China Resources Beer Group has spent three billion yuan (about HK$2.81 billion) to buy 13 breweries with a combined annual capacity of nearly two million tonnes of beer - ranking it third after the top two, Tsingtao Beer and Yanjing Beer - the 21st Century Economic News reported.
The three companies are competing to buy breweries around the country in a rapid consolidation of the market.
China has about 500 breweries, of which 80 per cent produce less than 50,000 tonnes a year. Last year, the mainland produced 22.31 million tonnes, putting it second in the world after the United States, with the top three brewers accounting for nearly 20 per cent of output.
That proportion is expected to increase this year.
China Resources' plants are run in partnership with South African Breweries.
Its biggest concentration is in the three provinces of the northeast, with breweries in Shenyang, Dalian and Jilin and 800,000 tonnes of capacity. Its latest acquisition was the second-best known brand in the northeast city of Harbin, New Three Star.
It also has plants in Tianjin, Chengdu and Anhui, with 100 per cent ownership.
It has been attacking the market just as many foreign brewers who invested in the 1990s have pulled out. The brewers have departed because they could not compete with local producers due to high costs for personnel and advertising and thin margins in a competitive market with strong protectionism. Foreign brands account for about 1 per cent of the national market.
The rapid emergence of China Resources has caused much comment in the press, taken by surprise that a company with no background in beer-making and no national brand has rapidly risen to third place.
"Is it a repeat of the China Strategic phenomenon?" asked the China Business Times, referring to the Hong Kong company which between 1992 and 1994 spent 3.3 billion yuan to acquire a majority holding of more than 100 state companies, including several breweries.
It used these assets for a listing in the United States, which raised a large amount of money for investment in the mainland, and then disposed of most of the companies it had acquired.
This aroused bitter debate in China, with many arguing that it was pure speculation.
Sources: SOUTH CHINA MORNING POST 14/05/2001