Harbin chief gives boost to Anheuser as battle hots up

Peter Lo, the chief executive of Harbin Brewery, China's fourth biggest beer maker, yesterday slapped down SABMiller in its attempts to wrest control of the company from arch-rival Anheuser-Busch.

Peter Lo, the chief executive of Harbin Brewery, China's fourth biggest beer maker, yesterday slapped down SABMiller in its attempts to wrest control of the company from arch-rival Anheuser-Busch.

The battle for Harbin has turned into the first contested bid for a Chinese company between two Western rivals. SABMiller has two seats on the board of Harbin and a 29.4 per cent stake.

Until last weekend it also had a strategic alliance with Harbin which the Chinese company has now rescinded. On Sunday Anheuser, the maker of Budweiser, revealed that it had bought a rival 29 per cent stake, prompting SABMiller to launch a hostile takeover bid on Wednesday.

In the unprecedented pell-mell surrounding Harbin, the brewer has switched allegiance to Anheuser. Mr Lo spoke out for the first time yesterday, attacking SABMiller for its plans to combine Harbin with Chinese Resources Breweries, in which SABMiller has a 49 per cent stake.

"We had hoped the tie-up [with SABMiller] would boost our brand and improve technology and sales. But in the past 10 months nothing has happened," Mr Lo said.

"We believe if you run a company in China, local management is important. Without the support of Harbin's management and staff, how can SABMiller run Harbin Brewery, even if it holds a majority stake?"

He said there was a conflict of interest between SABMiller's investments in Harbin and CRB which both operate in the north-east of China.

"Early this year we wanted to raise prices but they [CRB] wanted to take advantage of us and cut prices," Mr Lo said. He also said Harbin welcomed Anheuser's acquisition of a 29 per cent stake

Anheuser also has a stake in a rival brewer, Tsingtao Brewery Group. However, in a further blow to SABMiller, Tsingtao issued a statement yesterday supporting Anheuser's investment in Harbin.

Tsingtao, China's leading beer company, confirmed that Anheuser had secretly revealed that it was planning to buy a stake in Harbin. "With this background, Tsingtao supports Anheuser-Busch's action and believes that this transaction is beneficial to all parties," a Tsingtao spokesman said.