Profits will be up

Kirin Brewery Co. expects pre-tax profit for the current financial year ending December 2000 to rise 17% to ¥76 billion (US$760m). The brewer hopes to increase the sales of its low-malt beverages and to reduce expenses on promotions. It plans to benefit from streamlining production following the closure of its plant in Takasaki, Gunma Prefecture. Extraordinary profit from the sale of the brewery site in Tokyo, totalling at ¥2 billion, will go toward covering the ¥15 billion extraordinary loss incurred from closing the Takasaki plant.
As a result, net profit growth is forecasted at 10% to ¥33 billion. Sales for the year 1999 likely dipped 4% to ¥1.1 trillion as combined sales of regular beers and low-malt beverages fell 1.7%..

Seven to go

Asahi Breweries, plans to phase out seven of its 15 brands this year and concentrate on selling key brands such as Asahi Super Dry. The production of two national brands and five regional brands is scheduled to terminate in March. The move is expected to help increase operating profit by 42% to ¥95 billion (US$950 million). In the financial year ended December 1999 Asahi is believed to have seen another decline in operating profit amid increased spending on promotions that included a beer coupon campaign. The company hopes to reduce promotional expenses by ¥6 billion (US$60 million) this year.

Happoshu‘s the thing

Given the current economic climate in Japan, it is small wonder that the sales of low-malt beverages have continued to be on the increase. 83% of the respondents to Sapporo’s survey in June 1999 claimed that the price was the main reason for purchasing an happoshu.
Happoshu, as the sparkling malt beverage is called, was launched in 1994 and has since climbed to 19% of the total beer market. This was announced in a presentation by Dr Inoue at the Institute of Brewing‘s Conference in Singapore in March. While a 500 ml can of regular beer retails at ¥300 (US$3), a can of happoshu costs only ¥210. The ten happoshu brands have 5.4% ABV and BU between 17 and 21. Last year, 14 million hl of the beverage were produced by Japan’s brewers, except for Asahi..

East looks West

With a stagnating domestic market, the leading Japanese brewer Asahi has had to look for markets elsewhere. For two years now, Asahi has been working the European beer markets out of its London headquarters. Europe has proven a complex market compared with the initially targeted markets of south east Asia. Whereas consumers in the south east Asian markets already show an interest in Japanese culture (including Japanese food and drinks), European consumers still have to be introduced to Sushi, Sake and Asahi in larger numbers. Nevertheless, Asahi Super Dry will remain a niche product as it is not marketed as a commodity. Asahi’s management purposefully launched Asahi as a premium product at a premium, i.e. high price. In Germany, Asahi is distributed by Binding, in the UK by Bass..

Double or perish

Two Dogs alcoholic lemonade may have to stop doing business in Australia or double the alcohol content to escape tax rises threatening the company. Under the new tax system, the lemon brew will incur a 50.3% tax rise in line with spirit pre-mixes. This would increase the price of a six-pack from about A$10 to A$12 and a bottle bought over the bar from A$5 to A$6. Two Dogs has been excluded from tax breaks applied to other fruit wines and ciders - a decision managing director Duncan MacGillivray has described as "grossly unfair".

Thirsty Schützen

How strange that they should need the pretence. Each year in January, when the weather is really hot, Schützen and other revellers flock to Bonython Park, Adelaide, for two days of shooting competitions, bockwursts and beers. This year, nearly 1000 kegs of beer were consumed by a crowd of 25,000 people. Brew-wise, the German brand DAB scored highest with 540 kegs, followed by Adelaide brewer Coopers with 410 kegs. The main problems encountered by the paramedics were heat exhaustion and overindulgence. The life of a Schützen must be a tough one.

Hooked on gambling

Go for a walk along the streets of any inner city suburb in Australia and you are in gambler‘s paradise. Enter a pub and you will spot the "pokies" or poker machines tucked away in the back of the place. Australian watering holes are gradually being converted into "leisure centres" which is Australian for "gamblers’ den". Australians now have a staggering A$11 billion (US$6.7bn) a year gambling habit. Of the 82% of the adult population, nearly 300,000 people are classed as problem gamblers, accounting for A$3.6 billion in losses annually or around A$12,000 (US$7,300) per gambler. The cost to the community of gambling addicts - bankruptcy, productivity, crime, jail - has been estimated by the Australian Productivity Commission as A$5.6 billion on top of what is wagered and lost..

Pushing ahead

Foster’s Brewing Group has produced a 27.3% rise in net operating profit to A$243.3 million (US$148m) for the half year ended December 1999. Beer earnings were up 15%, wine up 34% and the contribution from leisure and hospitality rising 61%. Good gains in Europe and continued double-digit growth in the US saw the Foster‘s International business increase its profit by 54% to A$8 million.
In Asia, the brewing businesses reduced losses from A$15.1 million to A$6.6 million following the restructure of its China business, reduced losses in Vietnam and early success in India, a company statement says. On 18 February, Foster’s market capitalisation of A$7.32 billion rated the beverage to leisure group as Australia’s 20th largest company. Coca-Cola Amatil was rated 40th, Lion Nathan 73rd..

Boardroom changes

Foster’s Brewing Group announced that Foster’s Asia chief executive Jim King will succeed Nuno D’Aquino as the new head of the two divisions responsible for the biggest chunk of Foster’s profits. They are Carlton & United Breweries and the pubs and gaming division Australian Leisure & Hospitality.
Nuno D’Aquino, 58, has been elevated to the new position of deputy chief executive with responsibility for e-commerce initiatives and introducing a shared services platform across the group. The personnel and organisational changes give nourishment to rumours about Ted Kunkel’s succession. Foster’s CEO Ted Kunkel, 56, who has been at the helm since 1992, has said that he has no intention of stepping down. Mildara Blass’ managing director Terry Davis is also rated as a succession chance..

It‘s a funny old world

Tasmanian brewer J. Boag & Son may have been snubbed by Lion Nathan when the diminutive brewer offered to buy Kirin’s stake in Lion Nathan (see Brauwelt International No.1/2000). This has not stopped Boag‘s chief executive Philip Adkins from making a bid for the UK’s number two brewer Bass at the end of March. Delusions of grandeur? Far from it. Boag’s chief believes to be shortlisted with global brewers such as Heineken, Carlsberg and South African Breweries. Bass’s beer division is valued at up to US$3 billion, while Boag’s market capitalisation is A$50 million (US$30.5m). Therefore Mr Adkins has announced that he has secured the backing of Germany’s largest state-owned bank, Westdeutsche Landesbank. The German bank would provide debt plus some equity..