Anheuser-Busch to expand Budweiser sales in China

SHANGHAI (Reuters) - Anheuser-Busch Cos. Inc. (BUD.N: Quote, Profile, Research, Stock Buzz), the largest U.S. brewer, said it plans to double the amount of Chinese cities where it sells its Budweiser beer over the next five years from 100 now, citing "huge" growth potential in the country.

Anheuser-Busch hopes that more consumers in China, the world's largest beer market by volume, will switch to Budweiser and other more expensive brands, boosting the firm's presence in the more profitable premium segment, its country head said.

"A-B thinks the growth potential of the Chinese premium beer market is huge," YR Cheng, managing director of Anheuser-Busch Greater China, was quoted in an emailed statement as saying.

"We believe more and more Chinese consumers are able to, and want to, enjoy higher-quality beer."

The Budweiser brand claims only a tiny 2 percent of the overall market in China, but 40 percent of the premium brand segment, according to the U.S. brewer.

The company said it would increase distribution and support in China for Corona, the beer made by Mexico's Modelo (GMODELOC.MX: Quote, Profile, Research, Stock Buzz), in which Anheuser-Busch holds half of the shares.

China is a key battleground for rivals such as Anheuser-Busch and Britain's SABMiller Plc's (SAB.L: Quote, Profile, Research, Stock Buzz) as the average Chinese downs only 24 liters of beer a year, well below the average American's 80 liters.

Anheuser-Busch, which also counts Danish brewer Carlsberg (CARLb.CO: Quote, Profile, Research, Stock Buzz) among its rivals in the country, however estimates that Chinese consumption will double within a decade, and is expanding into China's smaller, county-level, cities.

Beer consumption in China, where a 640 ml bottle can sell for as little as the equivalent of 12 U.S. cents, has more than doubled in the past 10-12 years, Budweiser says.