Suntory Ltd., Japan's biggest wine seller, said it will distribute three brands of the California-based E&J Gallo Winery in Japan.
Suntory in March will import and sell River Crest and two other brands of the world's biggest winemaker, Suntory spokesman Ikuo Tamura said. The Japanese beverage maker expects initial-year sales of 1 million cases, or the equivalent of 16 percent of its wine sales for the year that ended Dec. 31.
Suntory said it is seeking to add brands and improve technology at its wineries in Japan and abroad. It said E&J Gallo is seeking to boost sales through its distribution channels.
Suntory's wine business had sales of about 44 billion yen in the year ending last December, down 10 percent from the previous year.
Japanese wine consumption fell 4.2 percent to 266,000 kiloliters in 2000, the second straight year of decline, after peaking in 1998, according to the National Tax Agency. Red wine sales rose before 1998, following reports that drinking red wine has health benefits.
Suntory earlier this year allied with French winery Castell to make the Japanese company's best-selling wines in France. Bordeaux-based winery Castell added production lines to make Suntory's Delica and Reserve brand wine products available for sale in Europe and export to Japan.