Japanese earthquake damages local breweries

By Guy Montague-Jones

- Last updated on GMT

Related tags Japan Economics

The devastating earthquake in Japan has caused significant damage at a number of the biggest breweries in the country.

The earthquake and subsequent tsunami has damaged factories across the country and caused major power cuts, bringing industrial production to a halt in many areas.

Beverage damage

In the beverage sector, Asahi Breweries has announced that production has been halted at factories in Fukushima and Ibaraki. The biggest brewer by volume in Japan is also reducing production 50 per cent at its Kanagawa plant because of blackouts.

Meanwhile, a Kirin Breweries plant in Sendai is out of action following the collapse of its storage tanks. According to a Nomura investor note, the factory accounts for about 10 per cent of Kirin’s total beer output in Japan.

Sapporo Breweries is also facing significant problems across its network of factories.

Nomura said its plant in Chiba is closed because there is no electricity and its factory in Sendai is out of action as a result of major damage and power cuts. The two plants together account for 40 per cent of the beer output from the company.

Beyond the beverage sector, major damage has been done across a range of industries from power, gas and water to mining, food manufacturing and metal.

Broader economic impact

Nomura said it expects the earthquake to cause more short term economic havoc the Kobe earthquake of 1995.

The bank said: “Considering the major disruption to infrastructure such as roads and electric power generation facilities, we think the short-term impact on economic activity could be greater than after the Kobe earthquake.”

It added that the Japanese economy is now likely to take longer than expected to recover from its current lull. But a slump in the domestic economy caused by the earthquake is not expected.

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