Beverage companies including Coca-Cola and PepsiCo Inc. are expanding in China, betting demand will continue to grow as the recession erodes consumer spending in the US. Coca-Cola’s

planned spending may also aid its $2.4 billion acquisition of China Huiyuan Juice Group Ltd., which was announced in September and is now awaiting government approval.

“Coca-Cola’s investment is a positive for the Huiyuan acquisition,” said Kevin Luo, a consumer goods analyst with Guotai Junan Securities HK Ltd. in Shenzhen, southern China. “This investment will help create jobs, which would obviously be welcomed by the government, so even though it will not have a direct impact on the acquisition’s approval, it cannot hurt.”

Pepsi said November 3 it plans to invest $1 billion in China in the next four years. Japan’s Asahi Breweries Ltd. in January paid $667 million for a 19.9 percent stake in Tsingtao Brewery Co., China’s biggest beer company.

Coca-Cola controls 54 percent of the Chinese soda market and Pepsi 31 percent, according to research company Euromonitor International.

Source: Bloomberg