E-Malt.com News article: Canada: Sapporo is laying out plans to expand Sleeman Breweries’ production outside Canada to Japan and USA

With the clink of two glasses of beer, Sapporo Breweries Ltd. kicked off its takeover of Sleeman Breweries Ltd. October 18, promising to improve efficiencies and boost investment at what was formerly the third-largest Canadian brewer, The Canadian Press posted October 18.

CEO John Sleeman shared a drink with his new boss, Nobuhiro Hashiba, at a news conference as the duo marked signing a deal that could boost the Guelph, Ontario-based brewer's presence around the world.

Sapporo bought the company for $400 million, including debt, in a deal that closed this week.

If everything goes according to plan, the Sleeman name could make larger footprints south of the border with a U.S. advertising campaign, as well as a rollout at Sapporo-owned restaurants in Japan, Sleeman said.

John Sleeman said completing the takeover marked a "bittersweet day" for him personally as he handed over the reins to the company his great-great grandfather George A. Sleeman founded in 1834 and which John resurrected in 1988.

For the first time since he was a teenager, John Sleeman has a boss to answer to when he goes to work.

"Fortunately my new boss, Mr. Hashiba (senior operating officer of Sapporo's international business), is an excellent manager," he said.

"We've gotten to know each other quite well over the past few years and I look forward to working with him well into the future to help take Sleeman Breweries to the next level."

The future of the company will be watched by the federal government, which agreed to the takeover on the condition that Sapporo would expand Sleeman's market and boost advertising.

"Our primary objective will be to grow business here in Canada, focusing on our premium beer segment, but also taking advantage of the growing consumer demands in the value segment," Sleeman said.

Already Sapporo is laying out plans to expand outside Canada. The first step is to place Sleeman bottles in Sapporo-owned restaurants across Japan, where it is legal for breweries to own pubs and restaurants.

From there, Sleeman will get a boost in the United States through new advertising campaigns.

Greg Newbrough, vice president of Sleeman's marketing, refused to disclose dollar amounts for an American promotion, but noted that the company's advertising budget would continue to be "a fraction" compared to Molson Coors and Labatt annual budgets, which run around $50 million.

Sapporo is required to make a presentation to the federal government within 90 days of the deal's close.

As for operations, there will be no immediate changes to the company's operations. Sleeman's management will stay in their positions and no further workforce cuts are expected. Since August 2005, the brewer has laid off more than 120 employees as part of a restructuring plan to boost its finances.

"(Sapporo is) committed to keeping things business as usual," Sleeman said. "That not only includes maintaining our people and facilities, but also our approach to the market."

Sapporo will be sending over two teams of Japanese workers to examine ways to increase efficiency at Sleeman's four breweries.

About Sleeman Breweries Ltd.

Sleeman Breweries Ltd. is the leading brewer and distributor of premium beer in Canada and the third largest brewing company nation-wide. The company has supplemented its core Sleeman brands, which are available in every province, with a family of exceptional regional brands. These include Okanagan Spring and Shaftebury in British Columbia and Alberta, Upper Canada in Ontario, Unibroue and Seigneuriale in Quebec and Maritime Beer in Atlantic Canada. Sleeman entered the rapidly growing value price category in 1999 by acquiring the Stroh portfolio brands in Canada. The company markets and/or distributes world class imported products such as Guinness, Grolsch, Samuel Adams, Scottish & Newcastle, Sol, Sapporo, and Pilsner Urquell, and produces Sapporo Breweries products. The company's products are also available in selected international markets. Sleeman generated total revenues of nearly $207 million in 2005, down slightly from $211.5 million the previous year, while net profits dropped to $8.1 million from $14.4 million.

About Sapporo

Sapporo Holdings Limited is a Japanese holding company with an enterprise value of CA$4.3 billion that is active in four business segments. Its Alcohol segment is engaged in the manufacture and sale of beer, sparkling liquor, wine, brandy and others. The Company manufactures alcohol products including Sapporo Draft Beer, Yebisu Beer and Draft One. The company distributes Guinness, Yellow Tail and Beringer in Japan. The Beverage segment manufactures and sells beverages, such as tea, mineral water, coffee, carbonated drinks, fruit juice, health drinks, sports drinks and others. It distributes Ocean Spray Cranberry in Japan. Its Restaurant segment is involved in the operation of beer parlors and restaurants under the store name Ginza Lion. The Real Estate segment is engaged in the operation and management of complex facilities that contains offices, housing, restaurants, and commercial and cultural facilities under the name Yebisu Garden Place, in addition to commercial and amusement complex facilities.


20 October, 2006