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Business Trends

AB InBev takes control of Bud sales in Japan

Global leader will cancel outsourcing deal with Kirin as it gears up for growth

AB InBev will stop licensing its Budweiser beer to Kirin Brewery and take over the brand's sales in Japan.   © Reuters

TOKYO -- Anheuser-Busch InBev, the world's largest beer maker, is making a big push into the Japanese market, taking Budweiser sales into its own hands from 2019.

AB InBev will cancel its licensing partnership with Kirin Brewery, which has produced and sold Budweiser in Japan since 1993. The two companies sent out a fax to wholesalers on Tuesday morning notifying them of the decision. Under the new arrangement, AB InBev's Japanese unit will import and sell the brand.

It was AB InBev that approached Kirin about the change. "It was a decision to propel further growth of the Japan business," a source at the Japanese unit said, without revealing specifics of pricing and marketing strategies.

The shift comes at a time when Japan's beer market continues to shrink. But AB InBev has its eyes set on a liquor tax amendment that will help bring down the price of regular beer.

Budweiser is one of the world's top-selling beers, along with the Snow brand of China Resources Beer (Holdings). It enjoys a global market share of about 2.5%. But sales in Japan have declined to less than 20% of peak levels reached in the 1990s, at around 8,000 kiloliters a year, according to the Kirin Holdings unit.

AB InBev will import and sell its Budweiser beer in Japan starting next year.

The beer market is shrinking in different parts of the world. As consumers look beyond mass-market brands in search of unique flavors and aromas, AB InBev is on the prowl for craft beers with potential. The company is strengthening its Japan business to support this effort. The Japanese unit's staff has ballooned to 40 from just a handful of people when it opened in 2015.

"We have received an acquisition proposal of nearly 10 billion yen [$89.9 million] from AB InBev," said a source at an established craft beer company in Japan.

Kirin has hit a wall in trying to increase sales of Budweiser. The company has apparently decided to pour human and financial resources into its own brands and craft beer.

AB InBev took over Japanese sales of the Hoegaarden and Stella Artois brands this January from Asahi Breweries, a unit of Asahi Group Holdings.

Kirin will continue to collaborate with AB InBev elsewhere in the world, such as in production of Kirin offerings at U.S. facilities of AB InBev.

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