Shagun Sachdeva, Consumer Insights Analyst at GlobalData, offers her view on Asahi’s Fuller’s deal
At a time when most companies are grappling with growing uncertainty over Brexit and economic uncertainty, Asahi seized the opportunity to further expand its overseas reach and have a greater distribution network on an international scale.
Similar to its Japanese rivals such as Kirin Holdings Co, Suntory Holdings Ltd., and Sapporo Holdings Ltd, Asahi is facing a major downtrend in the domestic market as health-conscious youth are cutting back on drinking.
This deal expands Asahi’s brand portfolio, as Fuller’s Frontier brand in the premium lager market and Cornish Orchards brand in the premium cider market join the company’s previously acquired brands, such as Czech market leader Pilsner Urquell, Hungary’s Dreher, Italy’s Peroni, Poland’s Tyskie and Lech, and Romania’s Ursus.
Based on terms of agreement, Asahi will also receive the benefit of a licence to use certain trademarks — including the Fuller’s name, logo and cartouche — for the provision of beverages, along with control of Fuller’s Griffin Brewery, in London, while the ownership of the licensed trademarks will be retained by Fuller’s.
During the time of acquisition of Pilsner Urquell and other eastern European brands in 2016, the Tokyo-based brewer stated that it was looking to establish itself as a global player with premium brand portfolio.
Therefore, the main driver of this deal, which is expected to complete in the first half of 2019, could be Asahi capitalising on the heritage of Fuller’s brands and leveraging Brexit as an opportunity to earn higher margins due to cheaper exports.
Most of the overseas ventures undertaken by Asahi produced mixed results and especially, since the Pilsner acquisition, it has shied away from investing elsewhere in Asia. With this deal, it would definitely secure the future of its brand.