Bye-bye, Pernod, welcome Diageo

Although non-Japanese alcoholic beverages imported or produced under license make up only a fraction of the domestic market, Kirin hopes to increase its domestic market share through addressing the diversification of personal preferences within Japan’s aging population.

Kirin Brewery Co. and Diageo will together establish Diageo Kirin Co. to open for business in June. It will be 51 percent owned by Diageo with Kirin holding 49 percent.

The agreement with Diageo will also allow Kirin to sell Kilkenny and Smirnoff Ice, in addition to brands already marketed by Kirin such as Gilbey’s Gin.

Kirin, Japan’s second largest brewer in terms of market share, produces and sells the two top-selling foreign brands in Japan, Budweiser and Heineken. But their combined sales accounted for just 0.7 percent – or 1.3 million cases – of Kirin’s beer sales in volume in 2008, it was reported

Annual sales of Guinness, ranked fourth in Japan, amounted to roughly 500,000 cases, according to Kirin. Each case contains 20 633-milliliter bottles.

Coinciding with the Kirin-Diageo joint venture announcement, French spirits company Pernod Ricard said its distribution agreement with Japan’s Kirin Holdings will end 30 September 2009.

Kirin has distributed Chivas Regal and other Pernod Ricard brands in Japan since January 2006.

Pernod Ricard Japan will distribute these brands from 1 October 2009. In keeping with corporate strategy, Pernod Ricard likes to sell its brands via its own sales force. This it considers a key factor for success.