Japan's number one beer producer, Asahi Breweries Ltd, has negotiated to buy the low-alcohol and shochu (distilled liquor) businesses of chemical firm Asahi Kasei Corp, the two companies announced today, for between ¥3bn and ¥4bn (US$22.7-30m).

The acquisition will be completed sometime in the current business year, when the production and development operations will be transferred to Asahi Breweries' liquor-making unit.

Asahi Kasei said it was shedding the businesses as part of a streamlining operation. The division had had revenues of ¥13.2 billion yen in 2001/02.

The move on Asahi Breweries part is part of a wider strategy by players in the Japanese beer market to diversify from their core business as price pressure and intense competition intensify the problems of operating in a declining market.

As well as buying the alcohol business of fermented chemical maker Kyowa Hakko Kogyo earlier this year, Asahi Breweries announced last week that it was forming a strategic partnership with the global spirits distributor Maxxium in Japan.

Kirin, the next biggest of Japans' brewers has also been brancinh out with deals to acquire the food business of Takeda Chemical Industries as well as buying Four Roses Bourbon from Pernod Ricard and Diageo