Wednesday, December 14, 2016

Big Beer, Big Business

Asahi Group has just announced the biggest purchase ever made by a Japanese brewing firm. It is buying several eastern European beer brands from ABInBev for $7.8billion. These include Lech, Dreher, Tyskie, Ursus, and (most notably) Pilsner Urquell.

Just a few months ago, Asahi acquired large breweries in western Europe, including Peroni and Grolsch, from SABMiller. The latest deal should give Asahi approximately a 9% market share in Europe.

Especially prominent is the acquisition of Pilsner Urquell, which has the highest market share in the Czech Republic, the top beer-drinking country per capita in the world. However, the overall market for standard beers in Europe is somewhat static, with more attention and growth going to premium or craft beers.

These acquisitions are likely to have little effect on beer drinkers in Japan. Pilsner Urquell, Dreher, Peroni, and Grolsch have long been available at supermarkets and larger liquor stores in the country. But they should help bolster Asahi’s bottom line, since beer consumption in Japan has been decreasing for over a decade, and this recent purchase will increase the company's percentage of sales from abroad to around 25%.