Japan's Sapporo to enter Vietnam beer market

Japan's Sapporo Holdings said on Thursday it would enter the Vietnamese market by taking a 65 percent stake in a beer joint venture with Vietnam National Tobacco Corp to tap its fast-growing market.

It marks the first major overseas expansion in three years by Sapporo, the smallest of Japan's four major brewers, as bigger rivals Kirin and Suntory have been aggressively snapping up overseas businesses to grow beyond a shrinking domestic market.

"Vietnam is Asia's third-largest beer market after China and Japan and this is a fast-growing market," said Tatsuya Komatsu, a Sapporo spokesman.

The company will acquire a 50 percent stake in the venture from Danish brewer Carlsberg and 15 percent from Vietnam National Tobacco for a total of $25.4 million.

The joint venture will build a beer factory in Vietnam and is scheduled to start selling Sapporo brand beer in early 2012, it said in a statement.

The venture aims for sales in 2019 of 150,000 kilolitres or $128 million.

Sapporo said it will actively seek further acquisition opportunities to enlarge its overseas business, which now accounts for less than 10 percent of its revenues.

Sapporo, the maker of Yebisu brand beer, acquired Canadian brewer Sleeman in 2006 for 30 billion yen ($340 million), but has been overshadowed by Kirin and Suntory in overseas expansion.

Kirin has spent $1.5 billion in the past two years to buy Australia's National Foods and Dairy Farmers and $2.8 billion to take full ownership of Australia's No.2 beer maker Lion Nathan.

It also acquired a 49 percent stake in the Philippines' San Miguel Brewery for $1.4 billion.

Asahi Breweries, locked in a fierce battle with Kirin for No.1 slot in Japan's beer market, said recently it could spend up to 400 billion yen ($4.6 billion) on acquisitions over the next few years, with an eye on Asian markets.

The Japanese brewers have been scrambling to diversify their products and geographic reach to reduce their reliance on the domestic beer market, which has lost 15 percent in volume in the past decade as the economy sputters and the population shrinks.