Japan: Asahi threatened to lose market leadership

From this year on, Asahi will no longer disclose sales volume data for its beer and quasi-beer products. Instead the company will only report the value of sales. While the brewer said it is putting more emphasis on its profitability and will therefore drop out of the race for volume and market share, industry observers see a more obvious reason for the move.

After a big shopping spree abroad with the purchase of SABMiller’s former business in Europe in 2016 for a combined value of USD 10.7 bn (inside.beer, 11.10.2016 and inside.beer, 13.12.2016) and  the recent purchase of ABInBev’s Australian unit Carlton & United Breweries at a price of USD 11 billion in July (inside.beer, 19.7.2019), Asahi has obviously neglected the domestic market.

“We are expanding with the goal of being No. 1 for the premium beer segment in every geographic area we’re doing business,” Asahi Group Holdings CEO Akiyoshi Koji, said in an interview in October. “The world is our market.” However, while other big brewers have moved into high-growth regions such as China and Southeast Asia, or exploring potentially lucrative businesses like cannabis-related products, Asahi has bought brewing groups in saturated markets like Europe and Australia and is caught in an ailing home market.

In the last months, the company has experienced a sales slump in Japan and may soon lose its position as the leading domestic brewer to Kirin. Sales of its mainstay AsahiSuper Dry beer has fallen for the third straight year and Japan’s falling population and the growing popularity of cheap chūhai spirits-based products will not alleviate the challenge.

In 2018, the ranking of the top breweries was still unequivocal. According to sales volume Asahi was clear market leader with a share of 37.4%, followed by Kirin with 34.4%, Suntory with 16%, Sapporo with 11.4% and Orion with 0.9%. However, while Kirin and Suntory plan to increase beer sales by more or less 1% this year, Asahi expects its beer and quasi-beer shipments to reach JPY 666 billion (USD 6.1 bn) this year, unchanged from 2019, as reported by the Japan Times today.

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