Global brewing giant SABMiller Plc's China venture hit back on Sep 6 at an accusation by the local government in the southwestern city of Chongqing that its sales promotions amounted to bribery.

In late August, the Chongqing government froze assets of the local operations of China Resources Snow Breweries (CRSB) for allegedly giving kickbacks totalling over 3.8 million yuan (252,000 pounds) to retailers in exchange for market access.

That had caused hefty losses for CRSB in the region, as its distribution network had collapsed and sales had halted, CRSB.

"It's a grossly unfair accusation," CRSB's chief marketing officer, Hou Xiaohai said. SABMiller holds 49 percent of CRSB while China Resources Enterprise Ltd. has 51 percent.

"When we promote our products, we do give our distributors things like freezers or a case of beer as a reward. but it is a widely accepted practice in the brewery industry, and we are no different from our peers," Hou said.

CRSB said Chongqing authorities had impounded 17,179 cases of beer, worth roughly 1 million yuan. It declined to say what proportion of the company's total China sales this represented.

Hou said Chongqing's action was a typical case of local protectionism designed to shut out competition for the benefit of Chongqing Brewery, the biggest beer provider in the city with an 80 percent market share.

CRSB has appealed to China's State Administration for Industry and Commerce as well as to the Chongqing government, Hou said.

China's beer industry is seeing fierce competition as global giants and local companies battle for market share.

Source:佚名