But analysts remain unconvinced that SABMiller will suffer lasting brand damage in the mainland. Their views come as the London-listed brewery confirmed the sale of its 29 per cent stake in China's fourth largest brewer to bitter US rival, Anheuser-Busch.
SABMiller became embroiled in the battle after Anheuser-Busch bought a 29.1 per cent stake in Harbin in early May. SABMiller responded with a hostile takeover bid, which was later trumped by Anheuser's US$717 million offer.
During the process, both Harbin's management team and local Government spoke out against SABMiller's bid, voicing their displeasure with the 10-month-old strategic partnership which existed between the two breweries.
With a 49 per cent stake in China Resources Breweries (CRB), SABMiller is already the dominant player in the northeast, and had hoped to create synergies by combining Harbin's and CRB's plants.
Local press also sided with the US brewery, leading some to question SABMiller's media strategy.
"It seemed from the outset that Anheuser-Busch had thought through its media strategy and who its key stakeholder audiences were," said Julian Hill, director at financial PR specialists Citigate Dewe Rogerson. "It didn't appear SAB had particularly strong inroads into the local press in China."
As Hill points out, however, "Anheuser-Busch's job was made significantly easier by having the support of the management group and the Harbin Government."
Harbin management, in the shape of chief executive Peter Lo, made well-publicised comments regarding their disappointment with SABMiller's contribution to their business. These were supported by Harbin Mayor Shi Zhongxing who said that Anheuser-Busch was "the right strategic partner" for Harbin.
"It's important that international companies understand the overall media landscape and the views of different stakeholder groups," said Hill. "That's particularly important for MNCs coming in."
However, an industry source close to the situation did not believe that SABMiller would suffer significant brand damage. "SAB has won the volume/scale war, but (Anheuser) is winning the brand/profile war," said the source.
"This will make (Anheuser) look good but, because SAB have not got any brands in China, I'm not sure it will directly affect them."
Unlike Anheuser-Busch, which has introduced its Budweiser brand in China, SABMiller has instead relied on a strategy of investing in and improving domestic beers.
The source admitted that the SABMiller's pullout from Harbin may constitute a setback in its attempts to bring one of its international brands to China. "SAB does have some brand challenges in China but it is very aware of those."
