Newspaper article St Louis Post-Dispatch (MO)

Budding Business: Anheuser-Busch Learns Ropes in China

Newspaper article St Louis Post-Dispatch (MO)

Budding Business: Anheuser-Busch Learns Ropes in China

Article excerpt

Cowboys are out, horses are in and the Budweiser girls . . . well, they may have to make some costume adjustments if they're going to venture this far from home.

With the launching of Budweiser beer in China this summer, Anheuser-Busch Inc. is learning a lot about how to sell an American icon in a very un-American place.

Cowboys didn't fare well with Chinese focus groups, but the St. Louis company's giant Clydesdale horses scored enough votes to make it into Budweiser's debut marketing campaign. Sports, particularly basketball and soccer, got high ratings for conveying health and happiness.

And the Budweiser girls? Stepped-up enforcement of China's advertising laws has created some confusion about the dos and don'ts of alcohol promotion. Anheuser-Busch has been allowed to distribute posters featuring attractive young women dressed in Budweiser swimsuits for use in bars and stores with an adult clientele.

But Chinese mothers have proven to be tougher critics. When the company hired several women to wear its trademark swimsuits at the Tsingtao Beer Festival this year, their mothers made them wear T-shirts beneath the body-hugging apparel.

Putting a cultural spin on the product is just one of the many skills Anheuser-Busch is acquiring as it launches a dizzying campaign not only to bring Budweiser to China, but to protect its position as the world's leading beer maker.

Within the past two years, the company outbid Netherlands-based Heineken for an 80 percent share of a brewery here in Wuhan, an industrial center in the nation's interior. Anheuser-Busch also purchased a 5 percent interest in China's leading beer maker, Tsingtao Brewery Co., and spent $477 million on an equity position in Grupo Modelo, Mexico's largest brewery. India and Thailand recently joined the list of more than 60 countries where Budweiser and 12 other company brands are sold.

Last year, the company's international sales expanded by 30 percent, to 4.5 million barrels, and international earnings grew by about 50 percent, officials said.

But this global push is neither cheap nor easy, given the intense competition and high costs of building breweries.

"The price of poker is very high," said Ray Goss, president of Anheuser-Busch Asia Inc., which is based in Hong Kong.

Still, Stephen Burrows, president of Anheuser-Busch's international operation, said Asia's relatively young population, expanding middle class and fast-growing economies provide an unbeatable combination of expanding beer sales and profitable investment opportunities.

Per capita beer consumption in this huge country is tiny - about 10 liters a year - compared to 85 in the United States. But beer sales in China - which has more than 1 billion people - expanded by 33 percent between 1988 and 1993 and are expected to soak up 46 percent of the growth in worldwide consumption through the year 2000.

For U.S., European and Asian brewers facing stagnant markets at home, China is the next frontier. …

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