• Profits up by 11% in 2010
  • Beer sales struggle in Japan
  • President dampens Foster's rumours
Asahi Breweries says Fosters beer price is too high

Asahi Breweries says Foster's beer price is too high

Asahi Breweries has reported a solid rise in full-year profits, but the Japanese brewer's president has dampened speculation that the group will bid for Foster's Group's Australian beer arm.

Asahi said today (8 February) that net profits rose by 11% for the 12 months to the end of December, to JPY53bn (US$644m). Operating profits rose by 15% on the year before, to JPY95.3bn.

Cost savings and fewer one-off charges drove earnings, with Asahi's net sales up by just 1% for the year, to JPY1.49tn. Sales in the group's alcoholic beverages business sank by a fifth as Japanese consumers continued to reduce their beer consumption. It expects the division's sales to be flat in 2011.

Japan's sluggish beer market has prompted all of Japan's big four brewers to seek acquisitions abroad over the last couple of years.

Despite this, Asahi's president, Naoki Izumiya, sought to quell speculation that his company will attempt to boost its overseas presence by bidding for Foster's beer unit, Carlton & United Breweries. Foster's is planning to demerge CUB from its wine arm within the next few months and analysts strongly expect takeover offers for the businesses.

Izumiya was quoted by Reuters today as saying that "the price [for CUB] is expensive and recently (Australia's) market is looking tough". He indicated that Asahi is more interested in increasing its 20% stake in China's Tsingtao, as well as ties with South Korea's Lotte Group.  

Asahi and SABMiller have been considered frontrunners for CUB, which is Australia's biggest brewer by volume. Asahi's main domestic rival, Kirin Holdings, owns CUB's main domestic rival, Lion Nathan.

Foster's is expected to announce more details on the timing of its demerger in its half-year results statement, due on 15 February.

Separately today, Asahi announced that it will change its name from Asahi Breweries to Asahi Group Holdings on 1 July.

For the full Asahi figures, click here. For the name change announcement, click here.