Japan's Asahi Invests 370 Billion Won in Hungarian Brewery to Target European Market

Dreher Invests 41 Billion Yen Over 10 Years... Revamping with Beer Tank Replacement
Japan's Beer Market Shrinks Due to Population Decline... Seeking Opportunities in Europe

Japanese beer company Asahi has decided to invest 41 billion yen (3.72 trillion KRW) over 10 years in Dreher, a Hungarian beer brand and Asahi subsidiary. The plan is to accelerate its push into the European market.

On the 26th, Nihon Keizai Shimbun (Nikkei) reported that Asahi Group Holdings will invest in renewing the aging production facilities of the Dreher brewery.

Dreher Beer from Hungary. (Photo by Ikemitsu)

Dreher, celebrating its 170th anniversary this year, is the number one brand in the Hungarian beer market with a 30% market share. Asahi acquired Dreher as a subsidiary in 2017 when it purchased beer businesses in five Eastern European countries from Anheuser-Busch InBev, the world's largest beer company, for 880 billion yen (8 trillion KRW).

Asahi plans to spend 30% of the investment by 2026 to replace Dreher’s beer fermentation and conditioning tanks. The remaining 70% of the investment will be used to expand warehouses and build new brewing facilities. Environmental measures such as the use of renewable energy will also be implemented.

Asahi already spent 11.6 billion forints (43.7 billion KRW) in 2022-2023 to replace Dreher’s filtration equipment and establish a new can manufacturing line. Thanks to this, production capacity jumped to 110,000 cans per hour, 2.2 times the previous level.

The reason for focusing on Dreher is Asahi’s overseas business strategy. Asahi is currently concentrating on the European market. In Europe, higher-priced beers account for a larger share of sales volume, meaning revenue is higher even with the same sales volume. In fact, from January to September last year, Asahi’s European sales price per unit rose by more than 15%, far exceeding the 9.5% increase in the Japanese market.

Meanwhile, the Japanese market is shrinking due to population decline and alcohol avoidance trends among younger generations, making new growth avenues necessary. Accordingly, Asahi has been expanding its overseas beer business through large mergers and acquisitions (M&A) over the past several years. Asahi plans to push for price increases at Dreher to raise the proportion of high-priced beers and significantly increase sales of its flagship product, Super Dry, in Europe.

Asahi’s competitors are also seeking overseas markets. Kirin Holdings invested growth capital in Indian craft beer startup Be Nine Beverage and is considering local production and sales of Kirin’s flagship product, Ichiban Shibori. Sapporo Beer began local production of its overseas limited brand, Sapporo Premium, in the U.S. last month. It plans to focus on U.S. sales by placing Sapporo beer in 1,700 Walmart stores nationwide.

This content was produced with the assistance of AI translation services.