Japanese drinks group, Suntory, has entered into a co-operation agreement with the French wine group, Castel, through which Suntory's main branded wines will be produced in France. Suntory is to collaborate with Castel to produce wines both for export to Japan and for sale in European markets.

The move follows a decline in sales of domestically-produced wine in Japan in favour of imported wines. Suntory is Japan's largest distributor of wine. Production lines have been added by Castel specifically for the Suntory wines.

Under the deal, the company will start production of Suntory's Delica and Reserve brands which will be on sale in Japan from September. These two products account for some 40% of Suntory's Japanese wine sales. The wines will also be sold in Europe through Castel's own network which will be the first time the Suntory brands have been offered for sale in Europe.