The world's largest brewer, US-based Anheuser-Busch, has formed a strategic alliance with China's largest brewer, Tsingtao.

The maker of Budweiser Beer and the maker of Tsingtao Beer will join their resources to develop the Chinese market further, Tsingtao said.

The details of the alliance are still being hammered out, Tsingtao said.

Anheuser-Busch already holds a 4.5% stake in Tsingtao.

Expansion

Tsingtao is attractive to Anheuser-Busch because of its extensive reach within China.

The Chinese brewer has been buying a string of small breweries in order to raise its share of the mainland market.

Tsingtao is China's leading beer brand

Its current market share of 11% should grow in the next few months as the brewer aims to raise its production and sales by 19% this year.

Tsingtao said its market share is growing by 6% per year.

And its profits should rise by 50% during the last six months of 2002 to more than 100m yuan.

Tsingtao, which is sold in more than 30 countries, is the best known Chinese beer brand outside China.

It accounts for 90% of China's beer exports and is the country's leading branded consumer product.