Steel Partners changes mind on buying Sapporo’s outstanding rights

We shall never find out the truth behind Steel Partners withdrawing its offer. It is equally likely that Steel Partners was strapped for money – many funds these days are.

Nevertheless, there is no denying that Sapporo has seen an ever-worsening financial and operational performance – if the brewer’s share price is anything to go by.

Steel Partners started buying Sapporo stock in 2004. In January 2008, the stock was priced at 940 yen. On 17 February the price was 381 yen.

Last year, Sapporo slipped from third to fourth place in terms of domestic market share.

Steel Partners declared its intention to retain its Sapporo shares. However, it will oppose the re-appointment of the brewery’s management at a Sapporo shareholders’ meeting in March.

Sapporo Breweries started a “neo-alcohol culture” with the launch of three products which taste like beer yet contain no malt at all. Thanks to the "pea protein" ingredient, Sapporo has managed to avoid paying the heavy duty on malt products. Thus it can offer a beer-like product at what it calls a “reasonable price”. Will the Steel Partners investors drink it? Not likely.