Asia Brewery bags deal to sell Asahi beer in PH

Neil Jerome C. Morales, The Philippine Star

Posted at Jan 27 2013 10:39 AM | Updated as of Jan 27 2013 06:39 PM

MANILA, Philippines - Asia Brewery Inc. (ABI), owned by tycoon Lucio Tan, is partnering with Japan’s Asahi Group Holdings Ltd. to exclusively distribute the Asahi Super Dry beer in the Philippines.

The companies target to develop the premium beer category in the P60-billion local beer market, officials said.

“This is a strategic partnership to elevate the level of premium beer in the Philippines,” said Joseph Cruel, assistant vice-president for business development of ABI.

“The premium beer market in the Philippines is quite small, just 0.1 percent of the total beer market,” added Hubert Tan, vice-president for marketing of ABI, noting that the total beer market in the Philippines is at only 200 million cases.

This pales in comparison with Hong Kong, Singapore and Malaysia, whose premium beer segment accounts for five to seven percent of total beer sales, Tan said.

Under the partnership, ABI will be the first exclusive distributor of Asahi Super Dry in the Philippines, which has been sold in the country since the 1990s through importation.

ABI targets to be the top player in the premium beer market currently controlled by the San Miguel Super Dry brand, Tan said.

“This is the first time we are attempting to build this market with a foreign partner,” Tan said.

Akira Tsuiki, international business section manager of Asahi Group, said the company stands to benefit from the strong distribution network of ABI.

ABI, the company behind alcoholic brands Beer na Beer, Colt 45, Tanduay Ice, Coors Light and Manila Beer, controls nine percent of the local beer market. It is also into non-alcoholic beverages such as Cobra energy drink, Absolute mineral water, Virgin Cola and Vitamilk.

“The market is basically the A and B market, which comprises two to three percent of the beer market’s consumption,” Tan said, adding that as sales volumes grow significantly, the company can use its brewery facilities to produce Asahi Super Dry locally.

The partnership will be in a long term basis, said Jorge Sevilla, senior vice-president for sales and marketing of ABI.

Takayuki Tanaka, manager for public relations of Asahi Group, said now is a good time to tap the Philippine market given favorable economic conditions.

Amid the implementation of the higher taxes on alcohol and cigarettes, ABI is still confident of growing demand.

“In terms of the impact (of higher taxes)in the beer market, we do not feel that it will be as strong compared to the hard liquor or cigarette. We are still quite bullish in the beer market,” Tan said.

Moving forward, ABI is looking at a deeper partnership with Asahi Group.

“This is perhaps a first step to something bigger,” Tan said, adding that ABI is hoping that its products like Tanduay Ice can be distributed by Asahi Group in Japan.

ABI also wants to sell the recently launched Coco Fresh in Japan and Korea, Tan said.

In December, LT Group Inc. (formerly Tanduay Holdings Inc.) acquired shares in ABI, bringing its total shareholdings to 99.99 percent from 90 percent. The acquisition is part of the consolidation of Lucio Tan’s various businesses under LT Group.

The reorganized company, which will become Tan’s listed flagship firm, will own shares in tobacco giant PMTFC Inc., Philippine National Bank, Eton Philippines Philippines Inc., Tanduay and ABI.

The consolidation aligns all Tan assets under one roof, allowing the group to leverage emerging opportunities in different sectors and provide better realization of value for investors.