Japan’s Pokka Sapporo Food & Beverage is divesting its vending machine business to local teas and waters producer Lifedrink Company.

In a statement last week, the subsidiary of food-and-drinks group Sapporo Holdings said it had entered an “absorption-type” split agreement with Lifedrink.

Lifedrink specialises in the production and sale of mineral water, sparkling water and tea, according to its website.

Under the arrangement, Lifedrink will create a new subsidiary to take over the vending machines business, while Pokka Sapporo will be the splitting entity.

Financial details on the deal were not disclosed.

“As the company responsible for the Sapporo Group's food and beverage business, we are promoting business portfolio management in line with the group's medium-term management plan while also working on structural reforms aimed at further development of each business,” the statement said.

The company cited pressures in the vending machine channel, pointing to “challenges” including “rising equipment maintenance costs and labour shortages”.

It also pointed to “sluggish” demand in the market, following pricing changes driven by “rising raw material costs and consumers' tendency to save money”.

In a separate statement, Lifedrink said the addition of a new direct sales channel will “contribute to further strengthening our business foundation”.

The successor company’s name and location have yet to be decided.

Lifedrink said the successor company is expected to generate capital of Y10m ($63,095).

The transfer will include part of the assets, liabilities, contracts and other rights and obligations connected to the vending machine business.

It will also include the shares of three subsidiaries: PS Beverage (PSB), Star Beverage Service (STB) and Okinawa Sunpokka (OSP).

Lifedrink's new subsidiary is due to be set up by the end of this month, with the transfer of the vending machine business expected to take place by 1 October.

Both Pokka Sapporo and Lifedrink are also discussing a business alliance intended to ensure a “smooth transfer” and enable “future collaboration”, Pokka Sapporo said.

In its statement, Lifedrink said it is considering an arrangement under which Pokka Sapporo would supply products for a certain period, with sales continuing through vending machines carrying Pokka Sapporo trademarks.

In November, Sapporo Holdings lowered its forecast for annual revenue but raised its guidance for profits.

The brewer anticipates revenue of Y523bn ($3.38bn) in 2025, down 1.7% from its February estimate. In 2024, Sapporo generated revenue of Y530.78bn.