Asahi undaunted by Brexit worries

United Kingdom | Asahi’s decision to invest GBP 250 million in the UK brewer Fuller’s runs counter to the trend among some other Japanese companies like Panasonic or Toyota. This past October, Panasonic shifted its headquarters from London to Amsterdam, while Toyota threatened to halt production at its two UK plants if the country crashes out of the European Union without a deal.

Reuters says that Japanese firms have spent more than GBP 46 billion (USD 59 billion) in Britain, encouraged by successive British governments since Margaret Thatcher, which promised them a business-friendly base from which to trade across Europe.

Perhaps Asahi has been persuaded by a scenario, widely believed in London’s financial circles, that Brexit will not happen. The Money Men seem to believe that MPs will kick the can down the road until July. In due course, it could be a choice between a no-deal Brexit or no Brexit at all, which could swing the mood towards remain.

Whichever concerns Asahi may secretly harbour about Brexit, they were overridden by the need to expand internationally. Like its domestic rivals Kirin, Sapporo and Suntory, it faces a stagnant beer market in Japan.

Asahi’s purchase of Fuller’s builds on its 2016 acquisition of Peroni, Grolsch and Pilsner Urquell from AB-InBev in two takeovers worth more than USD 10 billion combined.

Mintel, a market research firm, estimates that the value of Britain’s beer market rose 3.9 percent to GBP 18.5 billion (USD 24 billion) in 2018. Nonetheless, beer volumes have remained broadly flat between 2012 and 2017 at around 43 million hl while competition has heated up. Heineken, AB-InBev, Molson Coors and Carlsberg are still calling the shots, despite being under attack from more than 2,000 craft brewers.

Asahi’s ventures overseas have produced mixed results. Since purchasing Pilsner Urquell, Asahi has exited some of its investments elsewhere in Asia. In 2018 it sold most of its nearly 20 percent holding in China’s Tsingtao Brewery to China’s conglomerate Fosun International for USD 847 million. It also divested its stake in an Indonesian beverage venture.