Q&A from Financial Statements Briefing for 1H of Year Ending December 31, 2017
<Date and Time> August 4, 16:00-17:30<Speakers> President, Representative Director Masaki Oga, Director Shinichi Soya, and President of Sapporo
Breweries Ltd. Hideya Takashima
1.

Japanese Alcoholic Beverages Business

Q. What has contributed to the successful development of increasing demand for Sapporo Draft
Beer Black Label, particularly among young people?
A. (SB President Takashima) Our Sapporo Draft Beer Black Label is selling well, supported by bothyoung men and women. SAPPORO has been increasing the opportunity for consumers toexperience this brand in promotional events such as THE PERFECT BEER GARDEN and THE
PERFECT DAYS. In these events, consumers who did not know about Black Label had a chance
to try one, and we received positive responses. We believe that is one of the reasons for theencouraging results.
Q. As consumer' buying behavior is changing with the rising retail prices of beer-type-beverages,some market experts say that your sales promotion expenses may increase in the second half.
What do you think?
A. (Director Soya) We do not have a plan to increase the amount of our sales promotion budget thatwas set at the start of this fiscal year. Instead, we are spending that budget on other proactive
measures in a more effective manner.
2.

International Business

Q. Regarding your recent announcement on the acquisition of Anchor Brewing Company, LLC
in the United States, what benefits do you expect from that company for the growth of your North
American Beer Business?
A. (President Oga) ANCHOR is a time-tested, leading brand in San Francisco, and many citizens
have been regularly drinking its products for over a century. We do not see the ANCHOR brandas a so-called craft beer, and we decided to acquire the brewery, feeling a sense of potentiality in
its appealing "brand."Despite annual sales of only around 3,700 million yen at present, we are confident that
ANCHOR will grow in the future, taking advantage of its participation in the Sapporo Group.
Since the acquisition of SLEEMAN BREWEIRES in Canada back in 2006, we have been
enjoying the benefits of an integrated value chain in the Canadian market. As a result, ourmarket share in Canada has increased from 4% to 8% over the ten-year period.
The acquisition of Anchor will give us the benefits of an integrated value chain in the UnitedStates as well. We now have broader choices for how we will market Sapporo Group brands – notonly ANCHOR, but also SAPPORO and SLEEMAN – in the whole North American market.
Q. You transferred part of the production of SLEEMAN in Canada to Vietnam. Do you think thisaction will be effective in improving the profitability of the Vietnam beer business?
A. (President Oga) Because of the production transfer to Vietnam, SLEEMAN BREWEIRES will

have extra production capacity, which will enable in-house production of products that are
currently outsourced. In the long term, we envision that the Vietnam plant will become a global
beer production base for Sapporo Group, from which their products will be exported to the world
market.
A. (Director Soya) Because of the production transfer, the capacity utilization rate of the Vietnam
brewery is expected to increase by about 20%.

End