July 31 (Bloomberg) -- Asahi Breweries Ltd., Japan’s top- selling beermaker, said first-half profit rose 17 percent, helped by the sale of a stake in a Chinese beverage venture.

Net income was 22.1 billion yen ($232 million) for the six months ended June 30 from 18.9 billion yen a year earlier, the company said in a statement today. Sales gained 0.6 percent to 670 billion yen.

Asahi, which may lose its position as Japan’s top beer seller to Kirin Holdings Co. this year, is speeding up expansion abroad to offset falling beer sales at home. Asahi’s domestic shipments of Super Dry and other beers slipped 1.3 percent in the first half.

“It’s hard for food and drink companies to survive just in a country where the population is shrinking,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd. in Tokyo, which manages $28 billion. “Asahi and other companies should go overseas for growth even as competition abroad intensifies.”

The Tokyo-based company will face increased competition if Kirin and Suntory Holdings Ltd. receive regulatory approval to proceed with a planned merger that would create a beermaker with half the domestic market.

Asahi cut its estimate for full-year operating profit by 4.3 percent to 88 billion yen and maintained its February forecast for net income of 50 billion yen.

The company booked a 16.1 billion yen gain in the first half from selling a stake in a Chinese beverage venture.

Asahi shares rose 1.4 percent to 1,505 yen at the 3 p.m. close on the Tokyo Stock Exchange before the earnings were released.

Japanese beverage makers are seeking acquisitions and partnerships to expand their overseas presence as their home market shrinks amid an aging population.

Overseas Expansion

Asahi completed the acquisition of Cadbury Plc’s Australian drinks unit this year, adding the Schweppes soft-drink, Cottee’s cordial and Spring Valley fruit juice labels. It also bought a 19.9 percent stake in China’s Tsingtao Brewery Co.

Kirin and rival Suntory said this month that they’re in the early stage of merger discussions. The move would create one of the world’s biggest beermakers that may challenge market leader Anheuser-Busch InBev NV.

Kirin may reach an agreement on its merger with rival Suntory, Japan’s third-largest beer seller, as early as this year, Kirin President Kazuyasu Kato said on July 25.

Asahi and Sapporo Holdings Ltd., Japan’s fourth-largest beermaker, were together as Dai Nippon Brewery, Kirin’s main competitor before World War II. The U.S. broke it up into Asahi and Sapporo after the war.

“It’s difficult to stay alone in a global competition,” Asahi Chairman Koichi Ikeda said July 16. Still “‘we have nothing to do with Sapporo even though people say we share the same roots.”

Share Battle

In the first half, Kirin edged out Asahi in beer shipments for the first time in three years. Kirin had a 37.5 percent share in the beer market, compared with Asahi’s 36.9 percent. Deliveries of regular beer at Asahi dropped 5.8 percent, while sales of no-malt beer surged 24 percent. No-malt beer has lower tax rates than regular beer.

Industrywide beer shipments of regular, low-malt and no- malt beer in Japan rose 0.2 percent in the first half, helped by a 27 percent jump in sales of no-malt beer.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Junko Hayashi in Tokyo at juhayashi@bloomberg.net

Last Updated: July 31, 2009 04:07 EDT