E-Malt. E-Malt.com News article: Japan & Hungary: Asahi announces $280 mln investment in Hungarian unit Dreher Breweries

Go back! News start menu!
[Top industry news] [Brewery news] [Malt news ] [Barley news] [Hops news] [More news] [All news] [Search news archive] [Publish your news] [News calendar] [News by countries]
#
E-Malt.com News article: Japan & Hungary: Asahi announces $280 mln investment in Hungarian unit Dreher Breweries
Brewery news

Japan's Asahi Group Holdings is spending heavily to build a European presence as its home market shrinks, following up a Rugby World Cup sponsorship with a 100 billion forint ($280 million) investment in Hungarian unit Dreher Breweries, the Nikkei Asian Review reported on January 28.

Dreher, which marks its 170th anniversary this year, was one of five Eastern European breweries Asahi acquired in 2017 from Anheuser-Busch InBev for 7.3 billion euros ($7.9 billion at current rates). It is Hungary's top beer company, holding around 30% of the market, with brands including its eponymous mainstay Dreher and the nonalcoholic Dreher 24.

Asahi is homing in on Europe due partly to the relatively high share of upmarket items in beer sales there -- an important factor given the impact of rising material costs. The brewer's average unit price in the European market rose 15% on the year in the first nine months of 2023, compared with 9.5% in Japan and 3.1% in Australia.

The Dreher investment package will update the brewer's aging equipment over the course of 10 years. The first phase, running through 2026, will put 30% of the total toward new fermentation and conditioning equipment as well as sustainability efforts such as renewable energy. The remainder will be spent on further updates and expanding storage space.

This comes after Asahi invested a total of 11.6 billion forints in 2022 and 2023 to replace compressors and filtration equipment and install a new canning line, more than doubling production capacity at the site to 110,000 cans per hour.

The plan is to pave the way for Dreher to raise prices, and make pricier beers a larger part of its sales mix.

Asahi also looks to grow sales of its signature Super Dry brand in Europe. In a bid to boost name recognition, it signed on as a top-tier sponsor of the 2023 Rugby World Cup in France, becoming the tournament's official beer.

Super Dry was sold at match venues and fan zones in France, tripling Asahi's sales by volume in a country where it had been a minor player. Sales for January through September jumped more than 30% on the year in the U.K., where more than 100,000 people participated in a ticket giveaway held by Asahi.

The brewer aims to grow overall sales outside Japan by more than 10% a year going into 2030.

Asahi has been expanding abroad through big acquisitions as the Japanese market continues to shrink, with the overall population falling and young consumers turning away from alcoholic drinks.

Its full-year forecasts for 2023 call for group revenue to rise 7% to 2.69 trillion yen ($18.2 billion) and core operating profit to climb 4% to 254 billion yen, with overseas operations accounting for more than half of each figure -- a record-high share in both cases.

But it ranked seventh globally by sales volume in 2022 with just 3.1% of the market, far behind market leader AB InBev's 26.1% and Heineken's 12.6%, according to Euromonitor International.

"We still haven't expanded our geographical presence enough" to catch up, said President Atsushi Katsuki.

Asahi has paid down its net interest-bearing debt to less than four times annual earnings before interest, tax, depreciation and amortization. The ratio is expected to drop below three this year, passing the threshold for Asahi to resume making big investments.


30 January, 2024

   
|
| Printer friendly |

Copyright © E-Malt s.a. 2001 - 2011