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Asahi bottle (Photo: Bob Jansen on Unsplash)
29 May 2020

A grim first quarter for Asahi

Japan | Japanese brewer Asahi reported a 45 percent decline in first quarter 2020 operating profit, as the covid-19 pandemic forced bars and restaurants in its major markets to shut, hurting its sales.

While turnover declined only 4.7 percent year-on-year, Asahi had to book an operating profit of JPY 12.9 billion (USD 120 million) in the January-to-March quarter, which is way below the JPY 23.3 billion in the same period a year earlier.

The beer and beverage producer has suspended all of its financial estimates, citing uncertainty over when the outbreak may end.

 Sales of Super Dry swoon

 In Japan, people were encouraged to work remotely in March. A State of Emergency was declared in early April and has been extended until 31 May. As a result, Asahi’s beer and beer-type beverages witnessed a sales decline of about 35 percent in April, with Super Dry alone seeing its volume drop 80 percent, after shrinking 40 percent in March.

While off-premise consumption has gained in popularity, with Asahi actively promoting parties over Zoom, the company said a slump in demand from restaurants and bars – many of which have been closed – couldn’t be offset.

Overseas businesses hurt too

In Europe, the decline in volume sales in April was even more pronounced. Asahi reported that in Italy sales dropped nearly 60 percent. In the UK, which includes the Fuller’s business acquired in January 2019, they were down around 40 percent.

In the Czech Republic the decrease was 25 percent. Only in Poland, where Asahi’s brands have a small on-premise presence, did overall beer sales shrink by less than 10 percent.

In Australia, where Asahi is in the process of taking over the beer market leader Carlton & United (CUB) from AB-InBev, beer sales were down 40 percent in April.

Previously, Asahi has bought Italy’s Peroni and Czech market leader Pilsner Urquell, among others, from AB-InBev, following the transaction with SABMiller.