Suntory Holdings Ltd. plans to dissolve its joint beer venture with China's Tsingtao Brewery Co. in the first half of next year to reallocate its resources amid a slowdown in the Chinese economy, company sources said Friday.
Suntory owns a 50 percent stake in both the manufacturing and sales companies, but the major Japanese brewery plans to sell all its stake by next June, a move that could be worth between ¥10 billion and ¥20 billion.
Suntory intends to license the production of its Suntory-brand beer, which is popular in Shanghai, to Tsingtao, while focusing its resources on the wine business in China and the beer business in Japan, according to the sources.
The Japanese brewery entered the Chinese market in 1981 when it started exporting beer there. After partnering with Tsingtao in 2012, it started the joint venture the following year.
Last year, Suntory beer sold in China reached roughly half of that in Japan in terms of quantity, partly because the beer is flavored to Chinese consumers' liking.