Asahi expects to begin production in June

Asahi expects to begin production in June

The soft drinks unit of Asahi Breweries has reached an agreement to buy House Food Corp’s branded mineral water business for JPY5.3bn (US$56.9m).

Asahi Soft Drinks Co announced this morning (8 April) that the purchase of the Oi Shii Mizu unit will include the production and distribution of the brand. This includes the land, buildings and equipment at both the firm’s Rokko plant and Nada water source point.

The Japanese brewer and soft drink maker said the target business recorded sales of JPY12.20bn (US$130.8m) in the fiscal year ended March 2009, accounting for 7% of the domestic mineral water market. Asahi, meanwhile, had a market share of 3%.

Asahi said it believes the acquisition will "enable it to strengthen the product portfolio of its domestic soft drinks business", with the aim of increasing this market share to 10%.

The transaction is expected to close by the end of May. Production is expected to begin from June, while the sale, marketing and distribution of the Oi Shii Mizu products will begin from July.

In February, Asahi Breweries reported a 6% rise in profits for 2009, but drinks sales struggled as an improved overseas presence failed to fully offset falling demand at home in Japan.