Liquor

September 2002

Major brewers prepare for deregulation of liquor sales. Controls on liquor sales licenses are slated to be relaxed in September 2003, allowing discount shops and drugstores to join supermarkets and convenience stores to obtain sales licenses. Beermakers have begun focusing on developing a new array of beverages to suit emerging tastes. They hope the expanded sales exposure will provide an excellent vehicle for parading their new products. Kirin Communication Stage Inc., set up by Kirin Brewery Co. began engaging in merchandising at supermarkets and convenience stores in the Tokyo area in September. It will expand business nationwide next April and boost the number of employees from 90 to 900. Demand for beer and low-malt beer stands at 7 million kiloliters a year, or 500-600 million cases (one case contains 20 633ml bottles). It has hit a ceiling and is expected to decline with the graying of society. Kirin Brewery and Asahi Breweries control over 70% of the total demand. Both aim to set up comprehensive liquor/beverage businesses by September 2003. Asahi Breweries and Kyowa Hakko Kogyo Co. and joined hands with Maxxium Worldwide of the Netherlands on domestic sales, restructured its in-house organization this month. Asahi Breweries now has 1,300 salespeople, the largest in the beer industry and will market 104 brands taken over from the three companies. The brewer turned Nikka Whisky Distilling Co. into a wholly owned subsidiary last year. It is expanding its organization and product lineup through active mergers and acquisitions this year. Kirin Brewery debuted "Kirin Chu-Hi Hyouketsu," a canned alcoholic concoction made with the distilled spirit "shochu" and soda water, in July 2001. The drink has been selling well at supermarkets and convenience stores this year, outpacing "Super Chu-Hi," the top label of Suntory Ltd. Kirin Brewery developed "Hyouketsu" jointly with Kirin Seagram Ltd. (now Kirin Distillery Co.) and Kirin Beverage Corp. Asahi Breweries entered the chu-hi market with the release of Asahi "Chu-hi Gorichu," developed jointly with Nikka, but suffered a complete defeat. Supermarkets and convenience stores are saturated. Sales are expected to increase at stores acquiring liquor sales licenses after the deregulation. Kirin Brewery worked out a unique attempt aimed at reviving the popularity of beer in cooperation with the distribution industry. The beermaker started selling "Kirin Ichibanshibori" under a beer-on-tap system in June in the Kanto-Koshinetsu region. Under the unique system, 1,520ml cans of Ichibanshibori are transported by refrigerated trucks to enable people who bought a server priced under 3,000 Yen to enjoy real draft beer at home. Kirin had sold some 160,000 cases (one case contains six 1,520ml cans) by August. Kirin Brewery's "Maroyaka Kobo" brew, which has been sold at about 400 outlets of Seven-Eleven Japan Co. in Tokyo since July, contains live yeast. Average sales of beer per shop are some 70 cans a week, outshining the firm's mainstay "Kirin Lager." The company expanded the sales area to include Kanagawa Prefecture. Asahi has enhanced its liquor and wine businesses through M&A, while Kirin has started producing low-alcohol fruit drinks. These efforts mark the start of a new struggle for the leadership in developing products that satisfy emerging tastes. (September 26, the Nikkei Business Daily)