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Kirin Cuts 2015 Forecast on Beer Sales, Australia Unit

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Kirin Cuts 2015 Forecast as Beer Sales, Australia Growth Slow
Cans of Kirin Brewery Co. beer are displayed for sale at a liquor store in Tokyo. Sales will reach at least 2.3 trillion yen ($29.3 billion) by 2015, lower than an earlier projection of 3 trillion yen, the brewer said in a statement to the Tokyo Stock Exchange yesterday. Photographer: Kiyoshi Ota/Bloomberg

Oct. 16 (Bloomberg) -- Kirin Holdings Co. fell the most in more than four months in Tokyo trading after cutting its 2015 sales forecast on weakening demand in Japan and slower growth at its Australian subsidiary.

Kirin dropped 2.4 percent to close at 1,009 yen in Tokyo, the most since June 8. Sales at Japan’s biggest brewer by market value will reach at least 2.3 trillion yen ($29.3 billion) by 2015, lower than an earlier projection of 3 trillion yen, the brewer said in a statement to the Tokyo Stock Exchange yesterday.

Kirin and Japanese competitors Sapporo Holdings Ltd. and Asahi Group Holdings Ltd. are making investments overseas as beer demand slumps at home. Industrywide beer sales in Japan fell 3.7 percent to 442 million cases last year, the lowest level since records began in 1992.

“Domestic liquor and beverage business didn’t grow as expected and growth in Australia’s dairy business wasn’t enough,” President Senji Miyake said at a press conference in Tokyo yesterday.

Kirin in February forecast 2012 earnings below analyst estimates amid declines in its Lion unit in Australia and in the domestic drinks market.

Kirin projects earnings this year of A$96 million ($99 million) from the dairy and soft drink businesses at its Lion unit, lower than the previous A$350 million target.

Earnings from Lion will miss estimates as discounting by the nation’s biggest retailers stymies its ability to raise prices, higher ingredient costs curb profitability and stalling consumer demand cuts sales, the brewer said then.

Cost Reduction

Kirin plans to cut costs to improve profitability at Lion’s soft drinks operations, the brewer said yesterday. Operating profit in 2015 will probably be more than 180 billion yen, according to the company’s estimate.

The brewer bought Brazilian beer company Schincariol Participacoes in 2011 and increased its stake in Manila-based San Miguel Brewery Inc. to 48 percent in 2009.

Kirin, which bought a 15 percent stake in Singapore-based beverage company Fraser & Neave Ltd. in 2010 and approved selling F&N’s stake in Asia Pacific Breweries Ltd. to Heineken NV last month, is considering how to collaborate with the conglomerate, Miyake said yesterday.

The company will continue to sell its beer through Tiger beer maker Asia Pacific Breweries, he said.

To contact the reporter on this story: Yuki Yamaguchi in Tokyo at

To contact the editor responsible for this story: Stephanie Wong at

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