Japan’s Kirin Group boosts its presence in Australia with the acquisition of Blackmores

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Kirin, a brewery from Japan, has decided to purchase Blackmores, a manufacturer of vitamins from Australia, for a total of A$1.88bn ($1.24bn; £999.4m).

In the face of declining beer sales and tighter alcohol regulations, Kirin is shaking things up by diving headfirst into the healthcare industry to secure a brighter future. This bold move finds Kirin branching out into healthcare as it navigates the challenges of dwindling beer sales and increasing regulatory scrutiny in its homeland.

Since the pandemic, Blackmores has struggled to regain sales, and the deal provides them with 

an exit.

Before Covid-19, the Australian natural health company benefited from the “daigou” practice, where Chinese individuals purchased goods overseas and brought them back to China.

“The Kirin Scheme is an appealing transaction that involves paying with cash,” the chair of Blackmores, Wendy Stops, said.

“The Kirin Group’s well-established global network of networks and strong presence in Asia will allow us to extend our product portfolio and strengthen existing relationships as we capitalise on future opportunities,” she added.

Kirin is trying to diversify from the alcohol business, and this deal is the latest step in that direction.

The declining beer sales in Japan over the years can be attributed to changes in the lifestyle of young people. Recently, the Japanese government initiated a nationwide competition seeking novel ideas to increase alcohol consumption.

Also, The World Health Organization has been advocating for more stringent regulations on the alcohol industry worldwide, recommending that governments increase prices to discourage alcohol consumption.

Kirin offers a broader range of products beyond beer in its home country, including sugar-free and non-alcoholic drinks. The company also has healthcare businesses under its ownership, and in 2019 it entered into a partnership with Fancl, a Japanese supplier of skincare products and dietary supplements.

The completion of the deal is anticipated to take place in August. Marcus Blackmore, the son of the company’s founder and who holds an 18% stake, favours the agreement.

“The Kirin Group is bringing a unique set of skills, knowledge and resources that will help Blackmores continue to grow in Australia and globally,” he said.

Following the announcement, the Australian firm’s shares increased by over 20%, marking its highest gain in over seven years.

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