Molson Coors Brewing Co., Denver, purchased a 51 percent controlling interest in a new joint venture with the Hebei Si’hai Beer Co., Chengde, China, for a cash investment of approximately $40 million. The joint venture will have direct control over the Si’hai brewing operations, including its contract brewing business, and provide opportunities to expand the sales and distribution of a portfolio of emerging brands led by Coors Light and regional Chinese Si’hai beers.
The joint venture, known as Molson Coors Si’hai Brewing Co., will provide Molson Coors with a platform to further expand its distribution channels throughout China and give the company greater control over brewing, increased cost efficiency and more flexibility on packaging and brand innovation to grow the market. It will continue to market Si’hai brands as well as Coors Light, which first entered the Chinese market in 2003.
Molson Coors reports Coors Light has seen an average of 30 percent growth each year in China. The beer is available in more than 40 cities across China and is the third-largest super premium brand sold in high-end bars and nightclubs throughout the country.
“We’re very pleased with the growth we have experienced in China over the past seven years and have reached the point where we now need a stronger route to market and a more substantial platform to provide greater efficiency, flexibility and support for the continued growth of our Coors Light flagship brand,” said Kandy Anand, president of Molson Coors International, in a statement.
The regional brewer, Si’hai Group, was seen as an attractive partner because of its strong presence in the Hebei Province and its ability to build a cost effective and profitable business in a competitive environment, Molson Coors said. The Si’hai brands initially will be marketed regionally and will enable the partnership to better compete across distribution channels and price segments, the company said. The transaction is expected to close before the end of the second quarter.