Beer in Hong Kong – Part Six – the San Miguel Breweries at Sham Tseng and Yuen Long

Martyn Cornell has kindly given permission for extracts from his article, A Short History of Beer in Hong Kong, to be posted on our website.

The article was published in the Journal of the Brewery History Society, Brewery History, Issue 156, 2012.

Martyn has his own blog, Zythophile – Beer now and then, linked below.

Despite its title the article is quite lengthy and packed with information. This sixth extract begins in 1947 with the sale of the Hong Kong Brewery and Distillery Ltd…

That year [1947] however, the brewery was sold to the San Miguel Brewery Inc., the Philippines brewer. It looks to have taken some months to sort out the handover, because the inauguration of the new San Miguel brewery was not marked until the following year, on 21 May 1948, with a reception at the Hongkong Hotel attended by ‘hundreds’ of
Hong Kong’s leading businessmen, along with David MacDougall, the Colonial Secretary
(that is, head of Hong Kong’s civil service.) The first stocks of freshly brewed San Miguel beer would be coming onto the market ‘immediately’, the brewery revealed.(91) First-year
sales volume was 4,000 hectolitres – around 2,500 barrels.(92)

That same year, 1948, Jehangir Ruttonjee, who was now 68, donated HK$500,000 to fund the building of a tuberculosis sanatorium at the former Royal Navy hospital in Wan Chai, Hong Kong in memory of his daughter Tehmina, who had died of TB during an outbreak in
1943.(93) It was said to be the largest donation to charity in the colony’s history. Ruttonjee’s total donations reached HK1.3 million.(94) The sanatorium is now the Ruttonjee Hospital.

Under San Miguel the brewery enjoyed a quiet existence, about the only hiccup coming in 1950, when an accountant, Pedro Jose Tonnochy, 36, fled the firm after stealing more than HK26,600. Tonnochy, who had worked for the Hong Kong Brewery under Jehangir Ruttonjee until it was sold to San Miguel in 1947, escaped to Macao, where he eventually gave himself up to police after eight months. Ruttonjee spoke up for him in court: and Tonnochy was handed the comparatively light sentence of six months in jail.(95)

Please note this image is taken from Martyn’s SCMP article Roll out the barrel, linked below

In 1953 the company began an experimental farm to raise pigs and poultry. Two years later, in 1955, it introduced San Miguel Draught Beer to Hong Kong. A short-lived beer for the Chinese market, Ching San, was introduced in 1966, but disappeared in 1973, the same year a canning line was installed at Sham Tseng. Between 1974 and 1976 the brewery was expanded, with two sets of vertical beer tanks installed. Four years later, in 1981, an aluminium can filling line was installed, and the following year the brewery started
brewing Löwenbrau under licence.(96)

By now the Sham Tseng brewery had a rival, for the first time in its existence. In March 1978 the Danish company United Breweries announced that it would be building a Carlsberg brewery in Hong Kong, which would be in operation in 1980.(97)…[please see Beer in Hong Kong – Part Seven – Carlsberg brewery, Tai Po – opened 1981]…

…At San Miguel, negotiations had been entered into with Anheuser-Busch to sell the Hong Kong brewery to the Americans, but the talks broke down in June 1986 after the two sides had failed to agree a deal.(100) In 1991 San Miguel finally dropped the ceramic bottle labels used since it arrived in Hong Kong, bringing in paper labels instead.

Three years later, in 1994, San Miguel announced it was moving its Hong Kong brewing operations seven miles north, to an industrial estate in the new town of Yuen Long. Work started on the new site in December 1994. At the groundbreaking ceremony in Yuen Long, Andres Soriano, chairman of San Miguel Hong Kong, declared: ‘Our new brewery is needed to maximise the utilisation of the latest brewing technology and to maintain our
leadership in the beer industry’.(101) Doubtless the Filipino company was looking at the imminent handover back to Beijing of Hong Kong and the New Territories by Britain, due in 1997, and anticipating the potential sales opportunities among mainland China’s
billion-plus population.

San Miguel had already made a tidy sum selling the 11-acre Sham Tseng site for redevelopment for HK3.5 billion in November 1994. Eventually, ten 48-storey
residential tower blocks and eight seven-storey apartment blocks were developed on the seaside site.(102) At the same time, it had paid just HK$78 million for the Yuen Long site, thanks to government subsidies.(103)

The move also meant cuts in the workforce: 95 workers, 15% of the total of 630, were laid off in June 1995,(104) even before the Sham Tseng brewery closed in May 1996 after 63 years. They were followed by another 63, and then 53 more in June 1996, three months before the new brewery opened in September. It meant a third of the staff had gone in 12 months. Some of the men got rid of had worked for the brewery for 44 years.(105)
The HK$1.3 billion Yuen Long brewery, like its predecessor in 1933, boasted that it was ‘one of the most technologically advanced brewing facilities in the world’, and could produce the equivalent of 1.2 million cans of beer a day from 29 combined fermentation and maturation tanks – a million hectolitres (600,000 barrels). This was, in fact, less than the Sham Tseng
brewery could produce: but the smaller capacity came with considerably smaller overheads.(106)

That cost advantage lasted only 11 years. In June 2007, close to 60 years after it arrived in Hong Kong, San Miguel announced that the Yuen Long brewery would be closed at the end of September, with production transferred to its brewery in Shunde, opened in 1996, again in Guangdong province, again 50 miles away, but this time to the north-west, across the Pearl River Delta, where production and operation costs were lower than in Hong Kong. In October San Miguel said that the Yuen Long brewery would be converted to manufacture
soft drinks.

However, just 20 months later, in June 2009, the brewery restarted production of beer. In fact, the decision to begin brewing beer at Yuen Long again was announced in April 2008, only seven months after its closure. Sales were growing fast at the Shunde brewery, San Miguel said, and in a few years it ‘may not have sufficient production capacity to satisfy the demand of the Hong Kong and overseas markets’. At the same time the company expected that continued inflation, and the appreciation of the Chinese yuan, meant that the production and operational costs of the Shunde brewery ‘will not be materially different from the Yuen Long plant in the near future’. In addition, the Hong Kong government had just cut excise duty on beer to zero, which also boosted the competitiveness of a brewery
across the border from mainland. China.(107)

References:

91. Hongkong Telegraph. 21 May 1948. p.5.
92. http://info.sanmiguel.com.hk/Eng_Company/history_e.htm, retrieved 3 July 2013.
93. Straits Times. 20 March 1948. p.6.
94. Hinnells, J.R. (2005) The Zoroastrian Diaspora: Religion and Migration. Oxford: Oxford University Press. p.176.
95. China Mail. 25 October 1950. p.2.
96. http://info.sanmiguel.com.hk/Eng_Company/ history_e.htm
97. Wall Street Journal. 16 March 1978. p.10.
100. The New York Times. 25 June 1986. Section D. p.5.
101. South China Morning Post. 2 December 1994. Business Section. p.3.
102. South China Morning Post. 6 January 1998. Business Section. p.2.
103. Sunday Morning Post. 5 June 1994. p.4.
104. South China Morning Post. 21 June 1995. p.1.
105. South China Morning Post. 15 June 1996. p.6.
106. South China Morning Post. 26 February 1996. p.11.
107. San Miguel Brewery Hong Kong Ltd, announcement of 2007 final results, Hong Kong, 28 April 2008.

This article was first posted on 24th April 2017.

See:

1. The Brewery History Society website The Society was founded in 1972 to promote research into all aspects of the brewing industry, to encourage the interchange of information about breweries and brewing, and to collect photographic and other archive information about brewery history.
2. Martyn Cornell’s blog, Zythophile – Beer now and then
3. Roll out the barrel SCMP 28th August 2013 – Martyn Cornell article

Related Indhhk articles:

1. Beer in Hong Kong – Part One – the early days up to the planned opening of its first brewery
2. Beer in Hong Kong – Part Two – The Imperial Brewing Company Ltd
3. Beer in Hong Kong – Part Three – The Oriental Brewery 1908-1912
4. Beer in Hong Kong – Part Four – The Hong Kong Brewers and Distillers Ltd 1930-1935
5. Beer in Hong Kong – Part Five – the Hong Kong Brewery and Distillery Ltd 1936-1947
6. Beer in Hong Kong – Part Seven – Carlsberg brewery, Tai Po – opened 1981
7. Oriental Brewery – “The beer that’s brewed to suit the climate”
8. Hong Kong Brewers and Distillers -The Opening of the Sham Tseng Brewery
9. Hong Kong Brewers and Distillers – The Sham Tseng Brewery 1930-1935
10. Lady Southorn’s hop shovel – Hongkong Brewers & Distillers 1934
11. The Imperial Brewing Company formed 1905, commenced operations 1907
12. Wo Fat Hing Distillery, Lung Wo village