Kirin sells Brazilian beer brands to Heineken

Kirin is expected to lose tens of billions of yen when it sell its Brazilian beer operation to Heineken next month.

Nikkei reports Heineken will pay around 100 billion yen ($870 million) for Brasil Kirin.

Kirin had high hopes when it paid 300 billion yen for the Schincariol label - then the country's No.2 brewery - in 2011, as Brazil is the world's third-largest beer market behind China and the US.

But Brazil's economic troubles knocked Brasil Kirin back to the No.3 brewery position and handed Kirin its first-ever net loss in the year ending December 2015.

"Building up operations overseas is critical to Kirin's continued success as Japan's beer market shrinks," says Nikkei. "But pouring more money into Brazil is not the way to go: Kirin's market share there is below 10%, and both distance and poor communication with Tokyo have posed management hurdles. The goal now is to concentrate on Asia and Oceania, where the Japanese company controls a number of popular local brands."

Kirin started discussing potential partnerships with Heineken, ABI and Grupo Petropolis in September last year, but Heineken has proposed buying Brasil Kirin outright.