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Japan’s Kirin Enters Distribution Talks with Coca-Cola Bottlers

October 26, 2016

General Images Of Beer Brands As Japanese Breweries Announce Business StrategiesGeneral Images Of Beer Brands As Japanese Breweries Announce Business Strategies
Bottles of Kirin Brewery beer pictured in Kanagawa, Japan, on Jan. 9, 2013. Akio Kon/ Bloomberg

Japanese beverage company Kirin Holdings said it is in talks with Japan’s two Coca-Cola bottling companies, Coca-Cola East Japan and Coca-Cola West, on cooperating in distribution and procurement through a capital tie-up.

“We are discussing the matter with Coca-Cola group and nothing has been determined at this point,” Kirin (KIRI) said in a statement after the Nikkei business daily reported that they are in negotiations.

“We are looking at cooperating in distribution and procurement, a Kirin spokesman said. The agreement may be concluded before the end of the year, the Nikkei reported.

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Kirin is looking at cross-holding shares in a new entity formed by the merger of Coca-Cola West and Coca-Cola East Japan, while Coca-Cola (KO) through its Japan unit will hold a stake in Kirin’s beverage unit, the paper said.

The two Japanese Coca-Cola companies, bottle and distribute Coca-Cola drinks in Japan and manage networks of vending machines selling the beverages. The companies are business affiliates of Coca-Cola Co but are not subsidiaries.

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The two Coca-Cola bottlers, in separate statements, confirmed that talks were underway, but said no decision had been made.

Kirin’s shares gained 1.6% in morning trading in Tokyo, with Coca-Cola East Japan rising 5.5% and Coca-Cola West up by 4.8%. That compares with a 0.2% decline in the benchmark Nikkei 225 index.