Sapporo eyes review amid shareholder pressure

Big brewery: A file picture of a Sapporo beer factory. 3D, which owns 3.05% of Sapporo, has criticised the firm for undue focus on the real estate business. — Reuters

TOKYO: Sapporo Holdings says that it has set up a committee to conduct a strategic review of the business, as the Japanese beer group comes under pressure from shareholders dissatisfied with stagnant growth.

The committee consists of five Sapporo directors and two external experts: Takehiko Ogi, former managing director of the now defunct government-run Industrial Revitalisation Corp of Japan, and Ryotaro Fujii, senior adviser at private equity firm Permira, a company spokesperson said.

The company flagged it was setting up a committee in August, but revealed the details only after one of its shareholders, 3D Investment Partners, released a statement on Wednesday welcoming the launch.

3D, which owns 3.05% of Sapporo according to LSEG data, has criticised the company for what it said was an undue focus on the real estate business, as well as suboptimal capital allocation which 3D said hinders growth in the core alcoholic beverage business.

According to 3D’s statement, Sapporo “acknowledged” that accepting proposals from potential acquirers for the real estate business would be effective, and that “the committee’s remit includes a fundamental review of its business portfolio, including the possible sale or spin-off of its real estate business”.

The Sapporo spokesperson confirmed the committee was established in response to shareholder feedback.

However, he declined to comment on the details of what it would look into, saying the review would cover all its businesses.

In July this year, Sapporo announced that it would liquidate Anchor Brewing after failing to turn around the business, blaming a drop in sales on the pandemic.

Efforts to introduce new products and invest in the brand weren’t enough to revive sales, the Japanese brewer had said.

Sapporo, which bought Anchor Brewing for US$85mil six years ago, said it would take a six-billion-yen (US$43mil) impairment charge.

Sapporo had snapped up the century-old San Francisco brewer to gain a foothold in the US craft-beer market, and make up for declining domestic consumption as the number of young people reaching drinking age shrinks in Japan.

Sapporo has been under pressure from 3D to address “prolonged underperformance” since then. — Reuters