Japan’s four major brewers suffered during the January-June period, chiefly due to sluggish beer sales during the first three months of the year.
At the same time, three of the four raised their full-year sales targets for malt-free beerlike beverages, which have seen stronger-than-expected demand as a cheap alternative to regular beer.
Kirin Brewery Co., the largest brewer in terms of sales, said Wednesday that its operating profit fell 16 percent to 37.53 billion yen, on revenue of 740.28 billion yen, down 2.5 percent on a year-on-year basis.
Kirin officials blamed weaker-than-expected sales during January, February and March on bad weather, as well as a reaction to the strong demand it saw late last year.
From the beginning of the year, domestic brewers stopped paying volume transaction rebates to wholesalers. The termination of the practice, which had been used to subsidize steep store discounts, triggered inventory hoarding by wholesalers.
Meanwhile, robust sales prompted Kirin to implement a 1.5-fold upgrade of its full-year sales projection for malt-free drinks, introduced in April, to 29.7 million cases. At the same time, it slashed its sales projections for regular beer and “happoshu” low-malt beverages.
On Thursday, Suntory Ltd. said its operating profit dropped 6 percent year-on-year to 21.23 billion yen in the six-month period, while sales rose 2 percent to 637.75 billion yen. The profit decline was largely attributed to heavy spending on sales promotions for nonalcoholic beverages, it said.
The firm doubled its full-year sales target for malt-free drinks to 20 million cases, but cut its combined sales projection for beer and happoshu by 10 million cases.
During the first six months of the year, the country’s beer market saw the two largest brewers enter the “third beer” category.
Helped by a lower liquor tax, sales of these malt-free drinks exploded. While the combined market for beer, happoshu and malt-free pseudo-beers shrunk by 2.7 percent year-on-year during the first six months, that for the third category more than tripled, accounting for 14.3 percent of the total market.
Happoshu bore the brunt of this challenge; happoshu sales dropped by 20.2 percent year-on-year during the first half.
Sapporo Holdings Ltd. was hardest hit by the trend, logging a 5.29 billion yen net loss for the first half, following a 2.85 billion yen profit a year earlier. Sales dropped by 7 percent to 208.69 billion yen.
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