Battle Over Tsingtao Beer Trademark Rights Rages In Hong Kong.

In Hong Kong sales of China's most famous beer -- perhaps its best-known brand name of any kind -- have been plunging. Tsingtao blames its old Hong Kong distributor and a lack of good marketing, a source said, and it is now frantically fighting back with lawsuits seeking full control of the

Tsingtao Brewery Co. Ltd. dumped the distributor, China Beer (Hong Kong) Co. Ltd., at the end of 1998, and started the new year with a new partner, Tsingtao Beverage (Hong Kong) Co. Ltd. Tsingtao hopes a strong advertising campaign can persuade more drinkers in that area to reach for Tsingtao instead of heavily advertised rivals such as Heineken and Carlsberg. Tsingtao officials fear that without a persuasive ad strategy, their brand has quietly developed a local image as a stodgy beer for older people, according to news sources.

A top export official with Tsingtao vowed in a statement that the brewery will "re-launch its product in Hong Kong in a creative manner." The marketing effort comes after seeing sales in Hong Kong slide by a third over the past five years. Tsingtao bosses have watched with concern as sales plunged in Hong Kong, from 9,000 tonnes of beer a year in 1993, when the company was publicly listed in Hong Kong and Shanghai, to just 6,000 tonnes annually, a spokesperson said. (The Tsingtao spokesperson could not say how many bottles of beer this is -- it depends on the size of each bottle.)

Observers say Tsingtao's recovery plans face a big hurdle with China Beer, which says it owns the Hong Kong trademark rights for Tsingtao. China Beer has launched a series of newspaper advertisements, threatening to sue anybody who sells Tsingtao in Hong Kong without its permission. Tsingtao worries the ads could spook drinkers into thinking the local supply of Tsingtao will dry up.

After years of trying to regain the Hong Kong trademark through peaceful negotiations, Tsingtao twice went to court, hoping to get the Hong Kong trademark and an injunction to stop China Beer's ads. Observers say the Hong Kong beer war is the latest and perhaps final battle to be fought over Tsingtao in a saga that dates back to the communist Chinese "planned economy" of the 1950s and China's efforts to become more market-oriented in the 1980s.