Japan: Pernod Ricard and Japanese Kirin brewery have agreed to terminate their distribution arrangement. The news follows Kirin’s joint venture plan with Diageo, which was announced earlier this week.
Kirin has distributed Chivas Regal and other Pernod Ricard brands in Japan since 1 January 2006. Termination will be effective as of 30 September 2009. Pernod Ricard Japan will carry out distribution of these brands from 1 October 2009. The standstill agreement between Kirin and Pernod Ricard, whereby Kirin has agreed not to transfer its Pernod Ricard shares before the date of termination of the Distribution Agreement will also terminate on 30 September 2009.
Diageo and Kirin’s joint venture company, to be named Diageo Kirin Company, will be 51% owned by Diageo and 49% by Kirin, and is expected to begin operations in June 2009.
The new firm will develop business strategy for Diageo premium brands to be sold by Kirin in Japan. It will also provide nationwide brand marketing support to both companies, and on-trade sales support in the Tokyo, Osaka and Nagoya metropolitan areas.
The Diageo premium brands to be sold by Kirin and distributed through Kirin’s nationwide distributor network will include Guinness, Kilkenny and Smirnoff Ice, plus brands already handled by Kirin, namely Captain Morgan rum, Crown Royal, Gilbey’s Gin, Gilbey’s Vodka, Godiva, Myers’s rum, Seagram's Seven Crown and Seagram VO.
Diageo noted that Kirin has a sophisticated distribution network that extends nationwide, and has a strong sales pedigree in the Japanese beer market. Kirin said it will be aiming to increase demand and gain market share in the Japanese alcohol market, addressing the diversification of personal preferences within Japan’s ageing population.