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October 17, 2000
Asahi Aims to Create Food and Health Related Lifestyle Culture for New Era with Establishment of Medium-Term Group Management Plan

Establishment of New Business Structure for Asahi Beer Group and Development of New Businesses and Products
Asahi Breweries,Ltd.
Public Relations Department
Asahi Breweries, Ltd. (Head Office: Tokyo; President: Shigeo Fukuchi), announces its goal of new growth for the Asahi Beer Group in the 21st century with the establishment of its Group Management Policy, and a 2001- 2004 Medium-Term Group Management Plan.

In the 21st century, in response to such changes in the operational environment as the introduction of international accounting standards and the necessity of global business standards as well as to establish a new business structure for the Asahi Beer Group, Asahi aims to develop a business model that will raise profitability to the highest possible level of efficiency and encourage growth through its Group Management Policy and its Medium-Term Group Management Plan. Moreover, to strengthen and optimize its operations the Group will select and centralize its sphere of business, thereby increasing the Group's competitive strength and growth potential.
In 2004, the last year of the Medium-Term Group Management Plan, the Asahi Beer Group aims to record sales of \1.48 trillion, operating profit of \100.0 billion, recurring profit of \89.0 billion, and \45.0 billion in net profit for the term.
The details of the Group Management Policy and the Medium-Term Group Management Plan are as follows.
I. Group Management Policy
1. Vision
The Asahi Beer Group will take on the challenge of creating a fun and affluent lifestyle culture for a new era through its food and health related businesses.
The Asahi Beer Group has established a firm foundation for its business spheres in fields related to food and health and not only seeks to manufacture and sell high-quality products but also aims to support a fulfilling and healthy lifestyle to be a corporate group that consistently provides a wealth of fun beverages and contributes to its customers' enjoyment both physical and mental.
2. Group Management Policy
(1) Ensure growth of its alcoholic beverages, soft drinks, food, and pharmaceuticals, which have been newly categorized as core businesses
(2) Establish a solid profit base in the key businesses of beer and soft drinks
(3) Nurture areas of growth in the secondary key businesses of food and pharmaceuticals
(4) Strengthen profit bases in overseas beer business, especially China and Southeast Asia
(5) Withdraw from unprofitable and inefficient businesses
In addition to focusing on selection and centralization in its reevaluation of its business structure, the Asahi Beer Group will promote efficiency, profitability, and a high growth rate through the restructuring of processes in each of its businesses.
II. Medium-Term Group Management Plan
1. Group business structure
(1) Business structure and mission
[1] Key businesses
BeerLiquorSoft drinks
[2] Secondary key businesses
FoodPharmaceuticalsOverseas beer business
Overseas soft drinks business
[3] Supporting businesses
Can manufacturingBottle manufacturingInformation systems
DistributionRaw materialsFood service
The mission of the above business structure is to seek profit from key businesses, encourage profit and growth in its secondary key businesses, and strengthen competitiveness and contribute to the interests of key and secondary key businesses in its supporting businesses.
(2) New businesses and products
[1] Key businesses
Launch of happo-shu ( low-malt beer)
Launch of such liquor and cocktail products as chu-hi
[2] Secondary key businesses
Entry into self-medication business
Entry into environmental biotechnology related business
[3] Supporting businesses
Advancement of shared services business
To enable balanced growth and to capitalize on future sources of new profit, the Asahi Beer Group is carrying out the promotion of new businesses and sales of new products as described above.
Regarding key businesses, the Asahi Beer Group will develop new value improvement measures to raise the brand value of Asahi Super Dry and further expand its beer business while devising new proposals for all alcoholic beverages, and beer in particular.
Moreover, with a stable position in the beer market, the second step of this strategy is to enter the happo-shu market in 2001. Furthermore, following the establishment of Nikka Whisky Distilling Co., Ltd., as a wholly owned subsidiary, the Asahi Beer Group will promote strengthened cooperation in product development and new proposals in various fields, including the liquor and cocktail products market.
In secondary key businesses, the Asahi Beer Group will conduct aggressive investment in its business resources in the self-medication and environmental biotechnology related businesses, fostering these new businesses with the goal of increasing sales.
2. Restructuring of business processes
(1) Restructuring of processes in key businesses
[1] Restructuring of alcoholic beverages business
Asahi Breweries and Nikka Whisky will form a cooperative sales system, which will promote the integration of the beer and liquor businesses, and through strengthened marketing and operations the Asahi Beer Group aims to improve the competitiveness of its alcoholic beverage business. Asahi made Nikka Whisky a wholly owned subsidiary to achieve the best possible results from these efforts. Further, sales & management headquarters for the Asahi Beer Group has been established, and Asahi and Nikka Whisky will carry out the integration of business sites nationwide.
Moreover, to strengthen the market competitiveness of its alcoholic beverage business, not only will Asahi reevaluate the improved education and allocation of representatives, but to enhance the function of the Asahi Draft Beer Service, which deals in maintenance of draft beer, of operating eating and drinking establishments, it will also establish a retailer merchandising company to bolster point-of-sale activities at liquor stores and a consulting company for eating and drinking establishments to strengthen strategic operating activities. The Company plans to complete these projects by April 2001.
[2] Restructuring of soft drink business
Asahi seeks to accelerate the decision-making process through corporate governance reform, the implementation of an executive officer system, and the establishment of a CEO and COO. At the same time, the Company is planning to strengthen the business organization, assign indirect market responsibilities to the Sales Division, assign direct market responsibilities to the CS Sales Division, thereby forming a sales structure that can respond to the circumstances in particular channels.
Furthermore, the Company has established several core policies, which include the reform of corporate governance, management style reform, organization and human capital management reform and are based on Asahi Drink's action plan Fresh up Plan 21.
(2) Restructuring of secondary key business processes
[1] Fostering food business
Asahi plans to further growth by expanding its general food products lineup, developing new food products that contribute to health, and fostering businesses by making investment in new growth fields.
[2] Fostering the pharmaceutical business
Making the self-medication field its core, the Company aims to encourage growth through new product development and fostering businesses through investment in new growth fields.
[3] Reevaluation and centralization of overseas beer business
The Asahi Beer Group will strive to increase the brand recognition of Asahi Super Dry in overseas markets while pursuing stable profitability in all regions. With growing markets in China and Southeast Asia as its focus, the Asahi Beer Group plans to construct a business model that will simultaneously increase sales and ensure profitability. Furthermore, in North America and Europe, Asahi will focus its sales activities on specific regions with the aim of raising profitability.
[4] Fostering overseas soft drink business
To realize its plans for business expansion in the medium term, Asahi will expand its soft drink business in Southeast Asia and China, where there is potential for an increase in profitability.
(3) Restructuring of processes in supporting businesses
[1] Restructuring of food service business
Asahi is striving to promote efficiency and improve profitability in its food service business, which is made up of its general food service business, beer garden business, and new business development business. To accelerate its efforts, Asahi Beer Systems became a wholly owned subsidiary, and the existing nine companies in the Company's food service business will be consolidated into three companies. Furthermore, the Company will close unprofitable and inefficient businesses, scaling down the number of its outlets from 131 to 80.
[2] Restructuring of logistics business
Asahi plans an overhaul of its four-company group cargo system with the establishment of one company - Asahi Logistic System - in 2001, to control operations throughout Japan, strengthening its planning ability and making indirect businesses more efficient, thereby expanding the Asahi Beer Group's transport functions.
3. Introduction of new systems and structures to strengthen Group operations
(1) Establishment of Asahi Management Service Co., Ltd.
Asahi Management Service was established in October 2000 as a shared services company that plans for the integration of indirect services and promotes efficient services.
(2) Establishment of Customer Lifestyle & Culture Center
This center was established in October 2000 to conduct surveys and research related to customer preferences and lifestyles that will be used in the introduction of new products and the development of new businesses.
(3) Introduction of Group finance
With the goal of reducing finance-related costs, Asahi plans to improve the efficiency of fund operations through the use of its ability to procure low-interest Group stabilization funds.
(4) Introduction of in-house venture system
Asahi introduced a in-house public-offering system for new businesses as well as an entrepreneur registration system in July 2000 with the aim of enhancing the vigor of each Asahi Beer Group company and discovering new business opportunities within the Group.
(5) Introduction of evaluation standards for Group performance
Asahi will introduce evaluation standards for each Group company's performance in January 2001 that will include ROI, cash flows, and a quality indices with the goal of bolstering the Asahi Beer Group's operations management.
(6) Strengthening of investment criteria
With the aim of improving risk management in business expansion, new criteria for business investment, business loans and investments to clients, and capital investment, were established in October 2000.
(7) Establishment of Group authority standards
With the aim of advancing the delegation of authority within the Asahi Beer Group, Asahi introduced Group authority standards for each company in the Group corresponding to business mission, business risk, and independence of operations in October 2000.
(8) Strengthening of organizational structure
[1] Strengthening the role of the head office
Sales & marketing headquarters headed by the head office was established in October 2000 with the aim of strengthening the head office's role as the holding company of the Asahi Beer Group in planning comprehensive marketing strategies for the Group.
[2] Introduction of business headquarters system
With the aim of bolstering the profitability of the liquor business, in April 2001, Asahi will introduce a 3-headquarters structure at its headquarters, made up of the Liquor, Production, and International headquarters.


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