The Sapporo Scramble

There are several beer brands in Japan many of the pretty known around the world. Sapporo is one of them, actually one of the very earliest beer brewery company in Japan founded back in 1876. This major Japanese beer brand is heating up the news this past two weeks particularly yesterday.

In a nutshell, an American hedge fund which is already the largest shareholder of Sapporo Holdings Ltd. is wanting a TOB demanding to raise its stake to 66.6% from the current 18.6%, and the Sapporo side is solely resisting this suggestion. They do admit the fall of their share in the beer market having to have to compete with other major powers like Asahi, Kirin and Yebisu, but they still question the necessity of the buyout offer.

Business-wise, that is to say, if speaking purely for the benefit of the company's business value, a buyout may be an inescapable choice if the situation remains. It is not like the company has no experiences going through and more importanly overcoming similar difficulties - in fact it has gone through quite a bit. The controversy is not so much about the TOB but its potential hostility and for the general Japanese people, the fact that the offerer of this TOB being a foreign investment is quite a big and unwelcoming deal.

Certainly it is an age of constant and fierce competition in any kind of field and the world of business is always a survival. Yet there are so many - SO MANY - business in Japan from little shops, restaurants, hotels, companies, etcetra etcetra that have been going on for generations some with histories over a thousand years, that cling and keep pride in the authenticity of their business. We - including myself - really take pride in tradition which is a very precious legacyof history that cannot be replaced by anything else, and as much as we take pride in tradition and history we treasure the authenticity - or purity (but not to confuse it with radical nationalism) in a different term - of whatever we preserve being Japan originated and grown.

Nationalisim alone may be a controversial term to discuss about and I don't really intend to open up the half-taboo discussion on Japanese nationalism here. But this beer talk has a bit to do with our pride and how much it matters can be seen unusually clearly in the behaviors of the general public. In the past two weeks since the first news of the TOB the sales of Sapporo products (beer) have increased by thirty-something per cent at some of the liquor shops. The news last night showed some quick interviews to the customers who bought Sapporo but usually does not, some admitting that it was more due to sympathy that they were buying Sapporo beer, and some other clearly telling that they didn't welcome the TOB.

The protest of the public in this manner this clearly is not usual, and is probably so clear because the issue is about beer which is so very closely linked with the lives of many people. Then the reason for so many people to display protest is probably mostly sympathy deriving from the pride that I have briefly explained.
At the moment Sapporo is clearly not welcoming being taken over as could be seen in last night's news of presenting Steel Partners with a request containing 30 questions regarding the necessity of the TOB. If Sapporo agrees with the bid then I would feel like we have lost something that has been a big part of our culture so would probably a thousand other people. Then if it rejects the offer, Steel Partners is saying that they'll officially launch a hostile takeover bid and Sapporo would have to deal with undoubted difficulties.
Personally I hope that the former won't happen, and hope that other businesses with tradition wouldn't have to go through similar troubles.


Today's update on Japan Mode: Charmy Rop Chapter 11 - the story enters the climax... I think.