"The combination will take time and it will not have much of an influence on the Chinese market in a short time. We are paying close attention on it, " said a source with CR Snow.

InBev and AB did not comment on plans in integrating into the Chinese market.

InBev could face many problems, including how to build up a brand system in China and how to gap the difference of enterprise culture among the two combined companies.

An alcohol salesman surnamed Li, at VICS Club, one of the popular night clubs in Beijing, said that Tsingtao beer was one of the most popular brands, even more welcomed than Carlsberg and Corona Extra.

Owner of Erge Kebab at Dongsi in Beijing said, according to his experience of running small restaurants in different cities in China, people eating at chophouses preferred local beer than beer imported from other provinces. For example, Beijingers would like to drink Yanjing beer more than Qingdao or others.

Apart from the three major brands in China, some regions have developed their own brands such as Zhujiang beer in Guangdong province and Yanjing beer in Beijing, said Hu Xueyan, analyst of Central China Securities.

"Chinese breweries should take a positive attitude to strengthen its core competitiveness in order to weaken the impact of foreign enterprises," said Xu Biao, analyst of CITIC Securities.

(China Daily July 31, 2008)