Haitai Beverage to be put on the block by Asahi

Asahi Breweries of Japan said yesterday that it will sell Haitai Beverage, the No. 3 Korean soft drink company with a 10 percent market share, since Asahi reportedly wants to establish a partnership instead with Lotte.

Asahi Breweries acquired 20 percent of Haitai Beverage in 2000 and became its controlling shareholder in 2004, with a current stake of 58 percent.

Nihon Keizai Shimbun earlier reported that Asahi wanted to sell its Haitai stake because of falling sales and earning losses and to align itself with Lotte, which has a 50 percent local market share.

A Haitai Beverage representative confirmed the report, saying that employees were informed of Asahi’s decision on Monday. “Asahi’s decision is understandable as we’ve sustained a lot of losses,” said Kim Chang-seon of Haitai Beverage. “As of yet, the field is open to whoever might express interest and we hope to find a negotiation partner with a similar vision to our goals.”

Although Haitai Beverages has strong brands, including SunnyTen, Sunkist Family Juice and Nescafe, it has been suffering losses for a number of years, with sales last year falling by 10.2 percent.

The local beverages industry is undergoing a restructuring with the proposed sale of Haitai Beverage following that of Pasteur Milk. Possible buyers of Haitai could include Lotte Chilsung and LG Household & Healthcare, the parent company of Coca-Cola Korea, though neither has yet expressed interest.

Asahi Breweries is said to be negotiating with Lotte to develop value-added health drinks and sell them through Lotte’s distribution routes. Asahi established a beer import company with Lotte in 2004, through which it sells its “Super Dry” brand beer.

However, a Lotte Group official denied all knowledge of a partnership with Asahi Breweries. “It seems to be one-sided thinking on the part of Asahi Breweries,” said Lee Byung-hee of the public relations department at Lotte Group. “Asahi Liquor, our joint venture, is simply a beer import and sales firm.”

By Lee Jung-yoon [joyce@joongang.co.kr]