Loss of Suntory CEO leaves whisky maker listless

Davide Campari Milano NV

03/09/2025 08:52

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

By Hudson Lockett

HONG KONG, Sept 3 (Reuters Breakingviews) - There's never a good time to have your chief executive forced out by a police probe, but the timing of this week's departure at Suntory Holdings’ is particularly bad.

The Japanese food and beverage group revealed on Tuesday that CEO and chairman Takeshi Niinami, also head of Japan’s powerful Keizai Doyukai business lobby and an outspoken critic of Prime Minister Shigeru Ishiba, had resigned a day earlier following a police investigation into his purchase of supplements in potential breach of the country's strict drug laws. "I was not aware that it was an illegal supplement,” he told the Asahi newspaper. “I am innocent."

His sudden exit comes at a delicate time as the company, best known globally for its whisky, grapples with not only inflation at home but also looming U.S. tariffs. Suntory is not publicly listed but discloses financial results; last month, it reported a 36% year-on-year plunge in first-half earnings, worse than the falls of about 8% and 23% for competitors Kirin 2503.T and Asahi 2502.T , respectively. Suntory pinned the blame on “economic uncertainty” in the U.S. and Europe, currency fluctuations and one-off gains last year from selling an affiliate company—likely referring to the $1.2 billion sale of Courvoisier to Campari Group.

The tumbling profits at Japanese brewers come after they raised prices on beer and beer-like drinks in April for the first time in 18 months, joining a host of food and beverage groups across the country under growing pressure from rising input and labor costs. In February, Suntory had warned of a 23.4% fall in annual profit, to 135 billion yen ($916 million).

Despite that drop Niinami — who joined in 2014 as the family-run firm's first outsider president — has proved a competent steward during his long tenure. Against a shrinking home market, he successfully boosted foreign sales to half of the 3.4 trillion yen ($23.1 billion) in revenue last year, keeping pace with rival Asahi.

Now the pressure is on for his successor, the great-grandson of company founder Shinjiro Torii, to show he’s got the chops. He can start by taking a look at Suntory Beverage & Food 2587.T, the group’s listed subsidiary which produces non-alcoholic drinks like Orangina and Schweppes. Total return for the stock during Niinami’s tenure stands at less than 50%, compared to a 200% gain for Japan’s benchmark Topix Index .TOPX. Better performance at the unit might have helped offset this year’s dip in spirits sales, too.

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CONTEXT NEWS

Suntory Holdings CEO Takeshi Niinami resigned from the beverage group on Tuesday after a police investigation into his purchase of a supplement that may have breached the country's strict drug laws, Reuters reported. "I was not aware that it was an illegal supplement. I am innocent," Niinami told the Asahi newspaper.

Suntory's foreign sales close the gap with Japan https://www.reuters.com/graphics/BRV-BRV/xmpjeqzakvr/chart.png

(Editing by Robyn Mak; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on LOCKETT/ hudson.lockett@thomsonreuters.com))