TSINGTAO Brewery Co said yesterday that its profit in the first three quarters of last year will be cut by nearly one-fifth after paying higher tax on earnings.

The brewery, with 27 percent held by Anheuser-Busch, must pay tax of 33 percent for 2007 instead of 15 percent, it said in a statement to the Shanghai Stock Exchange.

Tsingtao Brewery, listed in both Shanghai and Hong Kong, said it would lose a profit of 135 million yuan (US$19 million) based on the new tax rate for the first nine months of 2007.

Net profit for the first three quarters in 2007 will decrease from 695 million yuan to 560 million yuan, while the impact on the fourth quarter will be disclosed later in its annual report, the company said.

Tsingtao Brewery, as one of the first mainland companies to list in Hong Kong in 1993, was given a 15-percent concessionary tax rate at that time.

Under new tax laws adopted this year, Tsingtao Brewery will pay less income tax in 2008, set at 25 percent. It is still waiting for advice from the tax authority to decide the company's tax rate before 2007, the statement said.

Shares of Tsingtao Brewery lost 1.78 percent to close at 23.68 yuan in Shanghai yesterday, while the Shanghai Composite Index decreased 1.69 percent.