© 2007 H Guy Williams 1 hguywilliams@gmail.com

TsingTao Brewery (in Jinan)

Thomson Financial Business Description:

The Group's principal activity is the production and distribution of beer products. It currently owns 50 breweries

and 3 malting mills in 18 provinces and cities all over China. Its product Tsingtao Beer has been distributed to

more than 500 countries and regions throughout the world.

Primary Symbols & Exchanges:

600600 - Shanghai

0168 - Hong Kong

TSGTY - Pink Sheets

TSGTF - Pink Sheets

Primary Industry:

Beverage

SIC Industry Code:

2082

- Malt Beverages

The Tsingtao Brewery was founded in 1903 by German settlers in Qingdao, China. Tsingtao Lager is brewed and bottled by the Tsingtao Brewery-the 10th largest brewery in the world. Also, Tsingtao Lager is the 12th largest beer brand worldwide. Introduced to the United States in 1972, Tsingtao soon became the top-selling Chinese beer in the U.S. market and has maintained this leadership position ever since. The Tsingtao brand is sold in more than 50 countries worldwide and accounts for more than 50 percent of China's total beer exports. In fact, Tsingtao is the number-one branded consumer product exported from China.

Tsingtao Brewery Company

Ltd

56 Dengzhou Rd.

Qingdao

Shandong 266071

China

Tel: 86 532 571 3831

URL: http://www.tsingtaobeer.com

© 2007 H Guy Williams 2 hguywilliams@gmail.com

© 2007 H Guy Williams 3 hguywilliams@gmail.com

Tsingtao Brewery to Establish Beer Production Base in Jinan Author:IEL Date:04-26-2007

The foundation laying ceremony for Tsingtao Brewery Co. Ltd’s 400,000-kiloliter beer production base was held in Jinan City’s Hi-tech Development Zone yesterday. The first phase of the project is expected to involve a total investment of approximately RMB400M, and will be completed and put into production in January 2008, with an annual beer output of 300,000 kiloliters. A spokesman from Tsingtao Brewery said the new base in Jinan City will play a strategic role in helping Tsingtao Brewery strengthen and develop its market share in Shandong Province. Tsingtao Brewery already accounts for a share of over 70% on

the medium and high-grade beer market in Jinan City.

Tsingtao Brewery Co. Ltd was established and listed on the Hong Kong Stock Exchange and Shanghai Stock Exchange in 1993, becoming the first company in China to list on two stock exchange markets simultaneously. The company operates more than 40 breweries and malt plants in 18 provinces, cities and regions across China, and has established a sales network spanning the entire country. Most indices of Tsingtao Brewery rank first in China’s beer industry, including beer output, total assets, brand value, sales and sales income, pretax profits, market share and exports.

© 2007 H Guy Williams 4 hguywilliams@gmail.com

"The beer was delicious and I sure am glad I went to the Tsingtao Brewery!"

Tsingtao Brewery Co Ltd 600600.SS (Shanghai)

Sector: Consumer/Non-Cyclical Industry: Beverages (Alcoholic) View 600600.SS on other exchanges

As of 11:00 AM EST

Y29.56CNY

Independent Research Broker Research

Tsingtao Brewery Company Limited Provides Guarantees for Subsidiaries

Mon Jul 30 20:00:00 EDT 2007

Tsingtao Brewery Company Limited announced that it would provide guarantees for the following two loans: a)

RMB 7.84 million acceptance bills applied to Rongcheng Sub-branch of China Construction Bank Co., Ltd. by its

70%-owned subsidiary; b) RMB 8 million acceptance bills applied to Huzhou Commercial Bank by its 95%-owned

subsidiary.

Tsingtao Brewery Company Limited Announces Dividend Payment Date

Thu Jul 26 04:00:00 EDT 2007

Tsingtao Brewery Company Limited announced that the Company will distribute a cash dividend of RMB 0.22

(before tax) per share on August 7, 2007 to all the shareholders of record on July 31, 2007. The Company's shares

will trade ex-dividend on August 1, 2007.

© 2007 H Guy Williams 5 hguywilliams@gmail.com

Tsingtao Brewery Company Limited Announces FY 2006 Dividend Payment; Announces Production

Capacity Increase Projects

Thu Apr 19 16:00:00 EDT 2007

Tsingtao Brewery Company Limited announced a dividend payment for fiscal 2006. All shareholders will be paid

RMB 0.22 (before tax) for each share held. The Company also announced that it would invest in a beer production

base which expects to yield an annual production capacity of 200 million liters. Phase I of the construction would

yield an annual production capacity of 100 million liters with an approximate investment of RMB 199 million. In

addition, the Company would put in a RMB 98.6 million investment in a production capacity increase project in

Jinan, increasing the annual production capacity to 300 million liters from the earlier 200 million liters.

Tsingtao Brewery Company Limited Announces Completion Of Transfer Of Shares

Wed Apr 11 01:07:00 EDT 2007

Tsingtao Brewery Company Limited announced that it has received notice from China Securities Depository and

Clearing Corporation Limited, Shanghai Branch of April 10, 2007, that, State-owned Assets Supervision and

Administration Commission of the People's Government of Qingdao (SASACQ) had completed the procedures of

transfer of total 399,820,000 state-owned shares registered under its name to its wholly owned subsidiary, Tsingtao

Brewery Group Company Limited, at nil consideration on April 04, 2007, hence SASACQ no longer directly holds

any shares in the Company and Tsingtao Brewery Group Company Limited becomes the largest shareholder of the

Company.

Tsingtao Brewery Company Limited Announces Ownership Interest Transfer

Thu Dec 21 01:24:00 EST 2006

Tsingtao Brewery Company Limited announced that its controlling shareholder, Supervision and Administration

Commission of the People's Government of Qingdao (SASACQ) proposed to transfer 399,820,000 shares

(representing a 30.56% interest in the Company) to its wholly owned subsidiary, Tsingtao Brewery Group Company

Limited (TBGCL) by administrative allocation at nil consideration, in order to strengthen the management of and to

rationalize the title of such shares. The 30.56% interest represents the entire shareholding held by and registered

under the name of SASACQ in the Company. It is anticipated that a transfer agreement will be entered into between

SASACQ and TBGCL. Further announcement in this respect will be made as and when necessary.

2006-8-29 11:44:00 a.m. HKT, AFX

Hong Kong-listed Tsingtao Brewery to build plant for 300 mln yuan

HONG KONG (XFN-ASIA) - Tsingtao Brewery Co Ltd said its board of directors had approved plans to build a

plant with annual output of 4 mln hectoliters of beer in Jinan, Shandong province.

It said in a statement the total investment for this project may reach 300 mln yuan and the plant should be completed

and put into operation by the end of 2007.

The company said the project will expand the company's existing market share in Shandong after its completion.

Separately, the company said it will relocate Tsingtao Brewery (Xuzhou) Pengcheng Co Ltd (Pengcheng Co).

© 2007 H Guy Williams 6 hguywilliams@gmail.com

It said the output capacity of Pengcheng Co could be increased to 1.5 mln hl from 0.8 mln hl, with additional

investment of 62 mln yuan.

Pengcheng Co will offset losses from the relocation with gains from the sale of land at the old plant, it said.

Anheuser-Busch Co of the US holds around 27 pct stake in Tsingtao.

Tsingtao Brewery Company Limited Announces FY 2006 Dividend Payment; Announces Production Capacity

Increase Projects

Thu 19 Apr 2007 20:00 PM BST

Tsingtao Brewery Company Limited announced a dividend payment for fiscal 2006. All shareholders will be paid

RMB 0.22 (before tax) for each share held. The Company also announced that it would invest in a beer production

base which expects to yield an annual production capacity of 200 million liters. Phase I of the construction would

yield an annual production capacity of 100 million liters with an approximate investment of RMB 199 million. In

addition, the Company would put in a RMB 98.6 million investment in a production capacity increase project in

Jinan, increasing the annual production capacity to 300 million liters from the earlier 200 million liters.

Tsingtao Brewery Company Limited Announces Completion Of Transfer Of Shares

Wed 11 Apr 2007 5:07 AM BST

Tsingtao Brewery Company Limited announced that it has received notice from China Securities Depository and

Clearing Corporation Limited, Shanghai Branch of April 10, 2007, that, State-owned Assets Supervision and

Administration Commission of the People's Government of Qingdao (SASACQ) had completed the procedures of

transfer of total 399,820,000 state-owned shares registered under its name to its wholly owned subsidiary,

Tsingtao Brewery Group Company Limited, at nil consideration on April 04, 2007, hence SASACQ no longer directly

holds any shares in the Company and Tsingtao Brewery Group Company Limited becomes the largest shareholder

of the Company.

Tsingtao Brewery Company Limited Announces Ownership Interest Transfer

Thu 21 Dec 2006 6:24 AM GMT

Tsingtao Brewery Company Limited announced that its controlling shareholder, Supervision and Administration

Commission of the People's Government of Qingdao (SASACQ) proposed to transfer 399,820,000 shares

(representing a 30.56% interest in the Company) to its wholly owned subsidiary, Tsingtao Brewery Group Company

Limited (TBGCL) by administrative allocation at nil consideration, in order to strengthen the management of and to

rationalise the title of such shares. The 30.56% interest represents the entire shareholding held by and registered

under the name of SASACQ in the Company. It is anticipated that a transfer agreement will be entered into

between SASACQ and TBGCL. Further announcement in this respect will be made as and when necessary.

Tsingtao Brewery Company Limited Announces Amended Terms of Share Merger Reform

Wed 20 Sep 2006 4:00 AM BST

Tsingtao Brewery Company Limited announced that it has amended the terms of its share merger. According to

the amended terms, holders of tradable shares will be compensated 1.79 shares and a cash of RMB 2.4 for every

10 tradable shares they hold by holders of non-tradable shares. The total number of shares and cash contributed

for the above compensation is 35,755,495 and RMB 48 million. In addition to the standard locking period stated by

the regulator, the controlling shareholder will propose an earnings distribution no less than 70% of the annual

realized distributable earnings in the three consecutive years from the implementation of the share merger

reform.

© 2007 H Guy Williams 7 hguywilliams@gmail.com

Tsingtao Brewery Company Limited Announces Ownership Interest Of SASACQ

Thu 31 Aug 2006 5:35 AM BST

Tsingtao Brewery Company Limited announced that its wholly owned subsidiary, Shandong ZYX Investment Co.,

Ltd. (ZYX), has entered into a conditional sale and purchase agreement with a wholly owned subsidiary of SASACQ,

Qingdao Conson Industrial Corp (Conson), whereby Conson has conditionally agreed to acquire from ZYX

26,164,384 shares (representing a 2.0% interest in the Company). After completion of the sale and purchase

agreement, the aggregate shareholding of SASACQ and Conson in the Company will increase from 30.6% to 32.6%.

© 2007 H Guy Williams 8 hguywilliams@gmail.com

Tsingtao Brewery Company Ltd. (00168)

Tsingtao Beer Twr., May Fourth Sq., Hongkong Zhong Rd.

Qingdao

266071

China

Tel: 86 0532 571 383186 0532 571 1991

Fax: 86 0532 571 3240

Business Manufacturing: Production and distribution of beer products

Auditors PricewaterhouseCoopers

SIC Codes 2082 - Malt Beverages

NAICS Codes 312120 - Breweries

Annual Sales $1,544.90 M Sales, Verification Letter

Profit before tax $83.06 M Profit after tax $59.37 M Dividend $38.08 M Share capital

$173.08 M Shareholders funds $754.07 M Employees

3,738, Verification Letter

Sales/Employees $413,295.00

Year Founded 1993

Fiscal Year Dec 31, 2006

Features International public company

Ticker (Stock Exch) 00168 (OTHER)

Principal Shareholders Anheuser-Busch (27)

URL http://www.tsingtaobeer.com.cn

http://www.tsingtaobeer.com.cn

Email Address info@tsingtao.com.cn

© 2007 H Guy Williams 9 hguywilliams@gmail.com

Officers

Stephen J Burrows - Chairman of the Board

Mark F Schumm - Director

Top Beer Makers in China, 2004

Market shares are shown in percent.

%

Other 60.00

Tsingtao Brewery 12.90

China Resources Breweries 10.00

Beijing Yanjing Beer Group 9.40

Harbin Brewery Group 4.30

Zhujiang Brewery Group 3.40

Industry Snapshot

Alcoholic beverages have long been a part of cultures throughout the world. As important consumer products, the

tens of thousands of brands of alcoholic beverages are heavily advertised and marketed. Global consumption of

alcoholic beverages increased steadily through the late 1990s and early 2000s, reaching about 195 billion liters by

2003. Average per capita consumption was about 31 liters per year. By 2004, China had overtaken the traditional

leader, the United States, in terms of market volume. After China and the United States, the largest markets for

alcoholic beverages were Germany, Russia, and Brazil. According to Zenith International, global consumption of

alcoholic drinks was expected to reach about 210 billion liters in 2007.

Beer

The beer industry segment had experienced several years of slowing gains and general flatness by the release of

State of the Industry Report for 2006. Although the Beverage Marketing Corporation claimed the drop was only 0.1

percent, it was nevertheless significant considering the tough competition from wine and liquor. Jeff Cioletti noted

that industry leader Anheuser-Busch's poor performance played a role due to its underachieving top-selling

brands. Other noteworthy aspects included the "trading up phenomenon" and craft beer popularity.

In the early 2000s, beer dominated the alcoholic beverage industry, with about 74 percent of the volume in 2002.

Production of beer throughout the world increased from 1.395 billion hectoliters (36.85 billion gallons) in 2000 to

some 1.468 billion hectoliters (38.78 billion gallons) in 2003. There were 56 major beer markets in the world, and

the average global per capita consumption of beer was 5.6 gallons. The country with the highest per capita

consumption was the Czech Republic with 45.3 gallons, followed by Ireland, Germany, Slovenia, and Austria.

Though the United States had traditionally been the largest beer market by volume, vigorous growth in China

spurred both production and sales in that country, which became the world's top producer in 2002 and was the

largest and most rapidly expanding market as of 2004.

© 2007 H Guy Williams 10 hguywilliams@gmail.com

Although Asia suffered economic downturns, beer consumption, in general, remained stable through the 1990s.

The demand in Asia accelerated in the early 2000s, especially in China. The outlook in the early 2000s was positive

as well for Latin America's beer market due to factors including fast population growth, increase in the beer-

drinking age group, and weather conditions in the region conducive to drinking beer. Consumption in Eastern

European countries, particularly Russia, also rose in the early 2000s, prompting major brewing companies to step

up investment in those regions.

Beverage Marketing Corporation managing director of consulting services Brian Sudano forecast a recovery in slow

increments for the beer segment of alcoholic beverages. He believed there was an important sales link to whether

beer marketers delivered relevant messages and focused on image rather than "the lowbrow humor of the past."

Organization and Structure

Beer

Beer is made from a "mash" of fermented barley, malt, and rice or corn. It is naturally cloudy from sediment in the

brews, but most commercial beers are clarified through filtration systems. U.S. brewers frequently use additives to

stabilize foam and to maintain freshness, while European brewers use these additives less often. Almost all bottled

and canned beer is pasteurized in the container to make sure that any remaining yeast does not continue to

ferment. Draft beer, served from large kegs in taverns, bars, and other outlets, is not pasteurized and must be

refrigerated to prevent spoilage.

In the early 2000s, lager was the highest produced beer in the United States. A pale, medium-hop-flavored beer,

lager averaged 3.3 to 3.4 percent alcohol by weight and was highly carbonated. While Europe also produced many

lagers, a higher percentage of European production was in heavier, dark beers. Stout, a very dark, almost syrup-

like beer, was also popular in Europe, particularly in the United Kingdom and Ireland. Porter is a sweet malt brew

with a high alcohol content of 6 to 7 percent. Malt liquor is beer made mostly from malt with a high level of

fermentable sugars. Light beers have reduced calories and are made either by reducing the amount of grain or by

adding an enzyme to reduce the starch content of the beer.

There are many different types of commercial beer, including pilsner, lager, ale, stout, light, malt liquor, dry, ice-

brewed, bottled draft, and nonalcoholic. In the United States, the market was further segmented by price and

quality, with beers being categorized as super premium, premium, and popular-priced. In the United States in

1999, light beer held a 40.1 percent share of the beer market, with premium accounting for a 25.9 share, and

popular-priced accounting for the remainder, according to the 2002 Market Share Reporter.

Microbreweries and brewpubs in the United States had annual double-digit increases throughout most of the

1990s. By the early 2000s, craft beer was the country's fastest growing segment of the alcoholic beverage industry.

Monica Soto Ouchi said industry insiders knew craft beer was "made using all or nearly all malt, rather than rice or

corn, for the fullest flavor." According to a study by the American Journal of Sociology, the surging popularity of

"craft brewing" was in part due to consumer reaction against established industrial brewers' lack of attention to

new consumer preferences for more variety of flavor characteristics, color, freshness, foam, and other qualities of

beer. In particular, 1997 was a banner year for the U.S. microbrewery industry. That year the number of American

breweries, 1,273, surpassed the number in Germany, 1,234, for the first time in at least two hundred years. Two

years later, there were 1,414 American breweries, compared to just 43 in 1983. In 2004, the craft beer segment

© 2007 H Guy Williams 11 hguywilliams@gmail.com

posted its second consecutive year of higher growth than imports.

However, at the end of the 1990s, a number of microbreweries experienced declines due to rapid over-expansion,

although firms that tended to focus on regional sales saw better results. Acquisitions, mergers, and shutdowns

were more common, but new microbrewery firms kept opening throughout the United States and continued to

show significant growth. In 2002, the Association of Brewers reported 396 microbreweries, 46 regional specialty

breweries, and 994 brewpubs in the United States.

Background and Development

Beer

Beermaking has been part of society and commerce almost from the beginning of civilization. A Mesopotamian

tablet from 7000 B.C. includes a recipe for beer, described as the "wine of the grain." The town of Pilsen (now in

the Czech Republic) produced the first pilsner beer in 1292. Pilsner Urquell, a major brand, traces its roots back to

that thirteenth century brew.

Germany, famous for its high quality brews, claims one of the world's oldest breweries--Brauerei Beck. Germany's

first brewing guild was formed in Bremen in 1489, and Beck was founded four years later, in 1553. All German

beers are still brewed to standards of what is called the world's first consumer protection act: the "Reinheitsgebot"

purity law of 1516, which calls for the use of only water, barley, hops, and yeast in brewing beer.

Current Conditions

Beer

As of the early 2000s, the Czech Republic had the highest per capita beer consumption rate in the world, almost

twice as much as the United States. The country produced 18 million hectoliters annually, with 1.5 million

hectoliters exported. At the beginning of the twenty-first century, it was the sixth largest market for beer in

Europe. However, Czech breweries suffered losses of approximately US$28 million at the end of the twentieth

century, mainly because of overcapacity. Poor management also plagued some companies. However, it was

forecasted that the Czech beer industry would be increasingly competitive in the twenty-first century with the help

of investment and management expertise from abroad.

According to the Beer Institute, the American beer industry grew steadily after 1996, with more than 3,500 brands

on the market by 2002--twice the number in the early 1990s. Production reached about 6.2 billion gallons in 2003.

However, domestic consumption grew more slowly, reaching only 0.7 percent in 2003. Analysts pointed to cool

weather, the Iraq war, and increased sales of wine and spirits to explain this disappointing performance, and

expected improved growth in 2004. Beer firms in the United States continued to embrace the hot import sector

and entered into agreements to become American distributors of international brands. Of the top 13 American

malt beverage producers, six are either import firms or are U.S. affiliates of beer suppliers based outside the

United States. Licensing agreements, direct exports, and foreign investment all played a role in the continuing

trend of U.S. beer producers growing foreign markets. The American beer industry exported to almost one

hundred countries in the world. In 2003, the most U.S. beer by gallons was exported to Mexico, followed by Hong

Kong and Canada. U.S. beer exports to Japan, which ranked third in 2001, dropped by 33.8 percent between 2002

and 2003. Beer imports to the United States were led in 2003 by Mexico, Netherlands, Canada, and Ireland.

© 2007 H Guy Williams 12 hguywilliams@gmail.com

In 2001, the German Embassy Newspaper Online reported that the average German was drinking less beer, and

the industry was suffering as a result. Per capita consumption, once 156 liters in the 1970s, fell to roughly 120

liters in 2003, a 20 percent decline. Overproduction plagued the 1,270 German breweries that produce more than

5,000 different brands. Beer suppliers were producing 30 percent more beer than demand required. Declining

sales meant that small companies--which have historically dominated the industry--were finding it increasingly

difficult to remain competitive. Between 2002 and 2003, Dutch brewer Heineken and Belgian company Interbrew

took over 18 percent of German production, and analysts saw more mergers and closures in the near future.

According to Time Europe, a Credit Suisse First Boston analyst predicted that a handful of global companies would

control 70 percent of German production by 2010. Factors contributing to the decreasing rates of beer drinking

include consumer preference for wine and soft drinks, lowered blood alcohol limit for drivers, and the perception

of beer as belonging to an older generation or of being unhealthy. However, microbreweries offering beer mixed

with various flavorings and fruit juices were seeing success with young beer drinkers.

Beer sales in Japan decreased in the late 1990s, and with no signs of an economic recovery, the future looked dim

for the country's beer industry. However, The Economist reported that Japan's low-malt beer (or happoshu in

Japanese) was making strides as the only sector of the beer market showing growth. Production of low-malt beer

in Japan started in the late 1990s. Brewers recognized that they could charge less for low-malt brews because the

government taxed beer in accordance to its malt content. Prices for low-malt beer were two-thirds less than for

regular beer; therefore, consumers looking for a bargain began stocking up. By 2000 low-malt beverages

accounted for one-fifth of Japanese beer sales. Kirin continued to be the top selling beer brand in Japan, and it

dominated the low-malt market as well. However, rival Asahi was catching up. In the mid-1990s, Asahi had owned

only one-fourth of the beer market, with half of all beer sales in Japan going to Kirin. That changed, however, with

the worldwide success of Asahi's Super Dry brand, which became the third best- selling beer in the world. In 2000

Kirin held 38 percent of the beer market, with Asahi right behind it at 36 percent. Asahi's low-malt Honnama beer,

released in February 2001, helped it to overtake Kirin as Japan's top beer maker in 2001. With sales of low-malt

beer remaining brisk through the early 2000s, Asahi introduced another happoshu beer in 2005, with plans to ship

three million cases in the first month alone.

The Latin American beer market continued to grow. In 2002, Venezuela topped the list with the highest per capita

beer consumption in the region (an average of 21.8 gallons). By 2003, the two largest beer markets in the region

were Brazil and Argentina, which enjoyed average annual growth of 5 percent. When AmBev, the Brazilian

company that virtually controlled the Latin American beer market (with a 64 percent market share in Brazil, 77

percent in Argentina, 94 percent in Paraguay, and 99 percent in Uruguay and Bolivia) merged with Belgian

company Interbrew in 2004, analysts predicted that the move would greatly improve exports for AmBev brands

outside of Latin America.

The Brewers Association predicted the U.S. would produce nearly 7 million barrels of craft beer in 2005. That

would represent nearly US$3.7 billion in revenue. Craft beers were welcome additions to the marketplace because

they were distinctive customized drinks. The seasonals offered attractive selections each winter and spring.

Although considered to be negative elsewhere, Ouchi acknowledged industry insiders celebrated the fact that craft

beer drinkers were not brand loyal and liked to try a variety of taste sensations.

According to Natural Health, the message several experts shared after completing research studies was that beer

tastes good and can be good for you. In 2005, Japanese scientists studied the antioxidants in beer and considered

the possible benefit they may have for protecting organ tissue from cancer-causing chemicals. A team of Tufts

University scientists found beer could assist with osteoporosis prevention. The substitution of oats instead of

© 2007 H Guy Williams 13 hguywilliams@gmail.com

barley in beer for a Swedish experiment pointed to a possible means for lowering LDL cholesterol particles and

boosting immune system function.

Major Countries in the Industry

China

The fastest growing beer market in the world by 2004, China increased beer production by 25 percent annually

through the 1990s. In 2002 it surpassed the United States in beer output, producing a total of 239 hectoliters. By

2004, beer production reached 29.1 million metric tons, a 15.2 percent increase from the previous year. As of

2004, China was the second largest global market for beer, with total sales rising by 85.99 percent since 1996.

Significant potential existed for further growth through 2010, since per capita consumption--about five gallons per

year--remained relatively low but was expected to rise with improving income levels. Analysts considered it likely

that China's beer market would be the largest in the world by 2010. China's entry into the World Trade

Organization spurred the country to improve quality and develop new products in the alcoholic beverage industry

to attract overseas customers. In the Chinese alcoholic beverage industry, the beer sector was the strongest.

According to Global Sources, by 2001 the country had approximately 530 breweries. Two-thirds of the segment

was made up of small-scale enterprises with yearly output of below 50,000 tons each. The top two Chinese beer

brands were Yanjing (headquartered in Beijing) and Tsingtao (hailing from Shandong). In 2000, Yanjing's total

output was valued at US$550 million; Tsingtao was ahead with US$716 million. By 2002, China's fragmented

market had attracted the interest of big international players like Anheuser-Busch, which that year increased its

shares in Tsingtao from 4.5 to 27 percent. In 2004, Anheuser-Busch went on to acquire Harbin, one of the three

most popular brands in China, for US$757 million. That same year, Scottish & Newcastle purchased a 19.5 percent

interest in Chongqing Breweries. Analysts expected continued rapid consolidation in the sector through the

remainder of the decade.

Chinese wine-making traditions go back more than two thousand years, and in 2001 China had approximately 300

makers of wine. Eighty percent of the country's wine output was from the Shandong, Beijing, Hebei, Anhui, Henan,

and Tianjing areas. China has exported its wine to more than ten countries, including the United States, Japan,

Germany, Belgium, Australia, Russia, Malaysia and Korea. One of the largest wine exporters has been Tonghua

Grape Wine Stock Co. Ltd., which specializes in wine made from grapes grown in Jilin Province's Changbai

Mountain. Wine output from China was expected to reach 500,000 tons by 2005. China's liquor market, however,

experienced a decline at the end of the 1990s. In 2000, the country produced 5.02 million tons, 14 percent less

than the previous year's output. Whiskey also rose in popularity in China, which imported only about US$1.9

million of Scotch in 1999 but more than US$47.8 million in 2004.

Mike Myer highly recommended a visit to China's first beer museum located in the country's best known brewery.

A visit to the "World of Tsingtao" offers a journey through at least 24 exhibits ending with a beer tasting

opportunity. In addition to trivia, beer drinkers can learn about the nutritional aspects and proper procedures for

sipping beer.