Cyrillic Partners

The thinking goes like this: China’s middle class is growing and the Chinese people have more disposable income to make vice-related purchases. An abnormally high relative saving rate may be an indication of repressed demand for goods and services related to leisure consumption. The U.S.-China currency exchange is stable compared to the way the dollar is tanking against the Euro. And so called “vice” investments tend to be robust in good times and even better during a recession. So why not invest in Chinese brewers, vintners and distillers?

Here’s a few picks:

Tsingtao Brewery Company Limited: Sells Tsingtao, Hans, Laoshan and Shanshui beers. Sold 5.05 million kiloliters of beer in 2007 both in China and abroad. The company is 27% owned by Anheuser-Busch and has 12.8% of the domestic beer market.

Recent News: Profits fell 19% due to increases in the corporate tax and disappointed analysts.

The problem: global barley prices are up 13 percent.

More to come.

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