China's biggest beer brewer China Resources Snow Breweries, started on Dec 18 the construction of its first plant in the outskirts of Shanghai in hopes of gaining a bigger market share in eastern China.

The wholly-owned facility in Baoshan Industrial Zone, with a total investment of 650 million yuan (US$94.89 million), will have an annual production capability of 400 million liters, making it the biggest beer production plant in Shanghai, said Zhao Chunwu, general manager of the plant.

The total consumption of beer in Shanghai is about 800 million liters while China Resources Snow's current sales stand at 80 million liters, said a company insider.

Shanghai, as one of the most competitive beer markets in China, is the China headquarters of the newly merged Anheuser-Busch InBev, the world's biggest brewer with an annual output close to 1 billion liters in China.

Moreover, the local brand Suntory occupies more than 30 percent of the market, meaning that China Resources Snow will be facing stiff competition.

In 2007, China Resources Snow sold more than 690 million liters of beer in China, 17 percent of the total national market.

(China Daily December 19, 2008)