Peng Zuoyi, president of the Tsingdao Group, said in the next six months, his company will expand beer sales through frequent acquisitions.

He said this new round of acquisitions will target the capital cities of every province.

To date, the Tsingdao Group has acquired more than 40 beer producers since it launched its acquisition strategy in 1999.

Peng said the main rival to Tsingdao and Yanjing, the Beijing-based beer giant, is Huarun Beer Group, whose market share has surged quickly.

Tsingdao and Yanjing have long held the top two positions in the domestic beer market.

Huarun, the newcomer to the market, is backed by hefty capital support from Hong Kong Huarun Group and has marched into the market aggressively.

Huarun has set up companies in Tianjin Municipality and Sichuan, Jilin, Liaoning and Anhui provinces.

Last week, Huarun also announced it will increase the pace of its acquisitions and plans to purchase three beer companies in Suzhou near Shanghai.

Through the acquisitions, Huarun aims to prevail in Shanghai, where no beer producer has an absolute advantage.

China produced 22.3 million tons of beer last year. Although Tsingtao and Yanjing are well-known throughout China, their sales accounted for only 10 percent of the country's total.

China boasts 500 beer producers.

(China Daily 06/25/2001)