Japans drinks market to hurt Sapporo Holdings sales

Japan's drinks market to hurt Sapporo Holdings sales

Sapporo Holdings has said that lower advertising spend and cost cutting should help it to significantly reduce net losses for the first half of 2010.

The Japanese firm said today (26 July) that it expects net losses for the six months to the end of June to be JPY600m (US$6.8m), compared to a previously forecast JPY2bn.

The brewer also expects to achieve operating profits of JPY1.2bn, versus its previous prediction of JPY500m in operating losses for the half-year.

The changes "reflect efficient use of advertising and sales promotion budgets, by focusing on core products ... and lower production costs, mainly in the Japanese alcoholic beverages business," Sapporo said.

However, the firm said that net sales are expected to be JPY177bn for the six months, almost 4% lower than previously predicted.

This figure reflects falling demand in Japan, but still represents growth on the first half of 2009, the company said.

The fall in sales underlines why Sapporo and fellow Japanese brewers - Kirin, Asahi and Suntory - are seeking to expand overseas to reduce their reliance on the domestic drinks market.

Earlier today, Kirin Holdings cut its earnings and sales forecast for the half-year.