The Japanese brewer, Sapporo Breweries Ltd., posted a 73% fall in net profit for 2002 to Y1.17 billion, with deflation and weak demand the principal reasons behind the decline.

A rise in volume sales of happoshu was not sufficient to offset the fall in the mainstream beer sales at Sapporo, while cut-throat competition in the happoshu sector had a negative impact on profitability.

Sapporo's group sales fell by 8.2% to Y511.75 billion, in line with a downgraded forecast the company issued in January. But net profit was below the Y1.6 billion the company had forecast last month.

For 2003, Sapporo is forecasting a group net profit of Y6.1 billion on group sales of Y525.0 billion.