By Andrew Starke
Rival Japanese brewers Suntory and Kirin are in merger negotiations that may have far-reaching consequences for the Australian market.
Contacted by TheShout, a spokesperson for Suntory Australia said the company was not prepared to comment beyond a short statement issued by the two companies in Japan.
“Kirin and Suntory have already collaborated in various operational areas such as distribution and procurement,” the statement said. “However, nothing has been resolved or reached an agreement in the area of business merger.”
Both companies own substantial assets in Australia and have recently been looking overseas to diversify their portfolios.
Kirin and privately held Suntory have posted relatively strong earnings in recent years despite the sluggishness of the Japanese beer and beverage market, which has been hurt by a shrinking population and a weak economy.
While nothing has yet been decided officially, reports in Japan suggest that any deal would involve the creation of a holding company.
Both Kirin and Suntory have significant interests in the local beverage market with Kirin on the verge of acquiring brewer Lion Nathan and being linked to a move for Coca-Cola Amatil last year.
Suntory purchased Frucor early this year and distributes international brands like Piper-Heidsieck, Cointreau, Remy Martin, Midori, Frangelico, Jagermeister, Glenfiddich, Jose Cuervo and Campari brands in Australia.
It remains to be seen what the Australian Competition and Consumer Commission would make of any merger in this country while, with over half of the Japanese beer market in combined share, it may breach anti-trust legislation in Japan.
Japanese companies have historically been resistant to mergers, preferring to diversify into other areas to increase revenue.