Japan's major beer makers may not be able to meet demand for suds this summer after breweries in northern and eastern Japan suffered major damage in the March 11 earthquake and tsunami.
Japan's major beer makers may not be able to meet demand for suds this summer after breweries in northern and eastern Japan suffered major damage in the March 11 earthquake and tsunami.
Sapporo Breweries Ltd., Kirin Brewery Co., Asahi Breweries Ltd. and Suntory Holdings Ltd. have all been forced to suspend or reduce production at facilities on the eastern Pacific coast of Japan's main island of Honshu.
"We apologize for the inconvenience caused by suspending orders and shipments of some products," Sapporo Holdings Ltd. President and Representative Director Takao Murakami told a shareholders meeting Wednesday.
The firm's subsidiary, Sapporo Breweries, suffered quake damage at plants in Miyagi and Chiba prefectures. Both facilities make beer and beer-like brews for sale in eastern Japan.
Sapporo, which has its roots in Hokkaido, has a strong sales base in the Tohoku region. Its Sendai plant in Miyagi Prefecture escaped the tsunami but suffered damage to key equipment in the quake itself. It has been forced to suspend production indefinitely.
The ground under the Chiba plant in Funabashi, Chiba Prefecture, was liquefied by the earthquake. Production was halted until Monday, and has yet to reach pre-earthquake levels.
Asahi Breweries' plants in Fukushima and Ibaraki prefectures were also damaged. The company has resumed production of its mainstay Super Dry brand at the Ibaraki plant but is only able to use three of its six brewing lines.
If the current production levels continue, Asahi representatives said they expected a maximum 30-percent drop in production capacity.
Kirin Brewery suffered damage at two plants in Sendai and Toride, Ibaraki Prefecture. It expects production capacity to drop by about 20 percent.
Koichi Matsuzawa, president of Kirin, told a shareholders meeting Tuesday that "while a storage tank was toppled, the core facilities are all right." He vowed to do everything he could to restore full production.
Miyagi, Fukushima and Ibaraki prefectures, which are all on the Pacific coast, boast relatively easy access to Tokyo and have therefore attracted major breweries.
Since the quake, the big brewers have tried to make up for shortages in the Tohoku and Kanto regions by ramping up production at plants in western Japan.
However, gasoline shortages and snarled road networks are making distribution difficult. The companies say they are already failing to meet orders from large supermarket chains and restaurants. Continued disruption to supply is expected to affect not only the market in eastern Japan but also the rest of the country.
The domestic market for beer and beer-like beverages has been contracting by 1 to 2 percent annually in recent years. The sector has shrunk by about 20 percent from a peak in the 1990s.
Before the earthquake, companies had been consolidating production bases and directing their attention overseas, particularly at the emerging economies of China and Southeast Asia. But those strategies are now likely to be revised.
"Right now, we need to rebuild our domestic business," one executive at a major brewer said.
That will not necessarily mean a single-minded focus on brewing beer. Following a government request, companies have been increasing mineral water production for people affected by the disaster, and that may lead to a new focus for some breweries.
(This article was written by Keiko Nannichi and Hisashi Naito.)