Japanese beer and whisky producer, Suntory, recorded a 31% drop in consolidated operating profit in 2001 to Y66.27 billion (€572.7m). Suntory blamed the fall on increased expenses and tough competition in the Japanese domestic market.

The group posted turnover of Y1.434 trillion, a rise of 2.4%, attributed mainly to strong food sales and its expanding beer business in China.

With competition in both the Japanese beer and soft drinks markets growing ever more fierce, Suntory spent Y584.96 billion on sales promotion and general administration during 2001, an increase of 11% on 2000.

But in spite of increased promotional spending, whisky, beer and other liquor sales still fell by 2% to Y573.15 billion as demand decreased, particularly in the on-trade.

Suntory said domestic beer sales were 6% down in volume terms at 54m cases (1 case = 12.66 litres) but, with the inclusion of growing sales in China, overall beer sales rose by 1% to 76.67m cases. Food sales, including soft drinks and processed food, rose by 9% to Y671.75 billion, on the back of strong tea and soft drinks sales in Japan.

Group net profit rose by 1.9% to Y14.18 billion. The increase was due to a lower special loss of Y15.79 billion against a special loss in 2000 of Y31.01 billion due to write-offs related to a shortfall in retirement and pension obligations.

Suntory forecasts group sales of Y1.44 trillion for 2002 with operating profits of Y98 billion and a net profit of Y27 billion, and will maintain a dividend of Y1.50 per share.