Japan: Asahi Breweries Ltd, Japan's top beer maker, reported on February 20 a 57.3 % rise in net profit in 2003 as cost cuts more than offset sluggish sales of beer, and said it expects profits to rise further in 2004. Japanese beer makers, faced with a steep contraction in the beer market due to a shift in consumer demand, have been aggressively cutting costs and diversifying their product lines to make up for sales shortfalls in their core business, according to Reuters.

Expectations that belt-tightening measures would buoy profit boosted the stock prices of the nation's top two brewers, Asahi and Kirin Brewery Co , by 20 percent each in 2003, outperforming a 10 percent gain in the Tokyo Stock Exchange's food sector subindex.

Asahi, known for its flagship "Super Dry" beer, posted a group net profit of 23.21 billion yen ($216.9 million) for the business year to December, up from 14.75 billion yen the previous year. The figure beat the consensus estimate of 22.7 billion yen in net profit by 12 analysts in a Reuters poll. Revenues totaled 1.4 trillion yen, up 1.8 percent. The company sees net profit climbing 12 percent to 26 billion yen in 2004. Asahi in 2003 benefited from strong sales of "chuhai", an alcohol-laced fruit-flavoured drink, after it acquired the alcohol divisions of Kyowa Hakko Kogyo Co Ltd and Asahi Kasei Corp in 2002. An improvement in the overall beverage business, which bled red ink in 2002, also helped raise Asahi's bottom line.

Rain and cool weather in July, and a tax hike on low-malt beer alternative "happoshu" in June, hit total Japanese shipments of beer and happoshu. Those shipments fell 6.3 percent in 2003, after a 2.6 percent fall the previous year.

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