Japan: The overall domestic beer market is expected to stay flat in 2006
The overall domestic beer market is expected to stay flat in 2006 despite booming sales of new, low-priced "third-type" beers, Asahi Breweries Ltd. and Kirin Brewery Co. reported on January 12, according to Reuters.
The size of the domestic market, including beer, low-malt "happoshu" brews and third-type, beer-like drinks made from hops and bean protein, is expected to fall 1 % in 2006, after an estimated 3 % drop in 2005, Kirin Brewery, Japan's second largest beer maker, said. The president of Asahi Breweries agreed, telling a news conference he saw the overall market staying flat or falling slightly this year.
Both firms, however, unveiled bullish sales forecasts, projecting more than 3 % sales growth for the year.
Asahi said it aimed for a 3.4 % rise to 200 million cases from its beer business this year through higher sales of its flagship "Super Dry" beer. One case is equivalent to 12.66 litres. The company suffered a 5.2 percent fall in overall beer sales in 2005, well short of its target announced in January last year of 1.7 percent growth and a revised 0.5 percent gain announced in August.
Kirin, known for its flagship "Lager" brand beer, said it expected its overall beer sales to grow 3.5 percent to 184.8 million cases in 2006, counting on an estimated 40 percent jump in sales of its beer-like drink "Nodogoshi Nama."
Kirin introduced the brand in April, snatching the top share of the growing lower-priced segment -- of which it now controls about 35 percent -- from Sapporo Holdings Ltd. .
Because the drink is not classified as beer, Japan's high alcohol tax, which makes up over 30 percent of canned beer prices, much higher than that in the United States, is not applied.
Kirin's overall beer sales rose 0.3 percent in 2005, below its 2.1 percent growth target announced last January and a revised 0.8 percent sales growth target unveiled in August.
The domestic beer market has shrunk by one-third in the last five years, prompting Japanese brewers to shift their focus to beer-like drinks, overseas expansion, other alcoholic beverages and soft drinks for growth.
Unlisted Suntory Ltd. said on Tuesday it expected its overall beer sales to fall 1 percent in 2006. Kirin's forecasts were released during the trading day while Asahi's came after the market closed. Shares in Asahi rose 0.07 percent to 1,492 yen and Kirin gained 0.51 percent to 1,380 yen. The Nikkei average rose 0.5 percent.
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