Suntory Says Worst Is Over as Cities Reopen After Virus Curbs

(Bloomberg) --

Suntory Holdings Ltd., the Japanese spirits giant, expects the worst is over as nations ease social distancing measures, allowing bars and restaurants to re-open after months of curbs that hit its business.

“Cities are slowly starting to reopen, and business is starting to get better,” said Suntory's Chief Executive Officer Takeshi Niinami who thinks his firm's global sales hit bottom last month. It could take more than six months for business to return to normal, he said, provided there is no second wave of coronavirus infections.

Japan, which has so far managed to contain the outbreak better than its Asian peers China and India without imposing a nationwide lockdown, has slowly begun getting back to business. A national state of emergency order was lifted in the Tokyo region late last month and establishments from gyms to schools are now re-opening their doors.

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Privately-held Suntory, the world's third-largest whisky maker and owner of well-known brands like Yamazaki and Hibiki, is also one of Japan's largest beermakers. Domestic beer sales were unlikely to return to previous year's levels anytime soon, Niinami said.

Niinami, who joined Suntory as the chief executive soon after its $16 billion buyout of bourbon maker Jim Beam in 2014, said no big acquisitions were in the works but the company may do smaller deals to bolster some business segments. Market valuations of companies are too high right now comparative to the economic situation, he said.

“What's important for us now is to unlock new demand and tap into new trends,” he said. “Things like cheaper products or value-added higher-priced goods, as well as cocktails at home are all important.”