October 15, 2007 / 9:12 AM / in 12 years

UPDATE 1-Asahi Drinks, Calpis team up on vending machines

(Adds company comments, backgroud)

TOKYO, Oct 15 (Reuters) - Asahi Soft Drinks Co Ltd 2598.T said on Monday it has agreed with Calpis Co., a wholly owned unit of food and seasonings giant Ajinomoto Co (2802.T), to merge their vending machine businesses to pursue economies of scale in a mature market.

For soft drink companies, vending machines are an important sales channel since they can sell items without a markdown, but the firms are finding it more and more difficult to secure prime spots as Japanese streets are already awash with vending machines.

Under the agreement, the two companies will set up a joint venture for vending machines, with Asahi Soft Drinks having an 80 percent stake and Calpis, known for its eponymous lactic acid beverage, taking the rest.

Asahi Soft Drinks has some 180,000 vending machines nationwide and Calpis has about 40,000 units. The combined number would make them the fourth-largest soft drink vending machine operator in Japan, Asahi Soft Drinks said.

“By increasing the scale of operations, we can have more points of sale,” said an Asahi Soft Drinks spokesman.

Coca-Cola Japan is the biggest vending machine operator with about 980,000 units in Japan, where there are some 2.3 million soft drink vending machines.

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