Corporate View: Anthony Buchanan, Asahi

Published: Sep 2021
Anthony Buchanan, Head of Treasury, Asahi

Asahi’s treasury story

Anthony Buchanan, Head of Treasury for Asahi’s European and international treasury operations, describes a thrilling role at the heart of the business and the financial markets.

Anthony Buchanan

Head of Treasury

Asahi logo

Asahi Europe is the European and international business of Japan’s Asahi Group Holdings, set up when Asahi acquired SABMiller’s beer businesses in Europe in 2017. Asahi is custodian of over 50 well-established local brands and runs 15 breweries, the oldest one dating back to 1615. The company brews 43 million hectolitres of beer every year and employs around 9,000 staff.

There is rarely a dull moment running Japanese brewing and food giant Asahi’s European and international treasury operations. From supporting the group’s expansion trail and helping integrate brands like Grolsch and Peroni or running FX and commodity hedging strategies, to expanding finance programmes or using treasury’s muscle to push sustainability, combine to leave Anthony Buchanan little time to sit back and relax.


Much of that time is spent managing complex commodity and FX hedging exposure in a business constantly buffeted by financial and commodity markets. The team hedge all transactional FX out to two years with a keen focus on large exposures against the euro in Romania, the Czech Republic and Poland due to supplier bases in these countries outside the Eurozone. “These are material markets for us – we review these currency pairs daily and investigate material forecast variances,” says Buchanan, who joined Asahi in 2017, tasked with building the European and international treasury from scratch. “We had nothing: no people or systems,” he recalls.

The need to hedge comes with the mismatch between paying suppliers and underlying costs in euros, versus Asahi sales across central Europe, all reported in the local currency of the brewery. “We also have indirect foreign currency exposures where we know the underlying costs are being driven by euros, but everything is invoiced in a local currency,” he explains. It requires clear sight of the underlying exposure, frequent discussions and planning with colleagues on the ground and staying across all currency movements. Currently front of mind is the strength in the Czech Koruna (“a good thing for us”) and Poland’s central bank poised to raise rates.

Further afield, his team have been providing FX support to Asahi’s import-dependent Korean business, navigating an exotic Korean Wong/Czech Koruna currency exposure that is impossible to hedge, a process recently complicated further by trade tensions between Japan and Korea. “Although we are importing a European brand, it is owned by a Japanese company,” he says. Just the type of knotty issue up for discussion in treasury’s monthly meetings with the CFO and risk committee, where the team comb through all hedging exposures and price levels relative to the budget and market.


In commodities he seeks to hedge a percentage of the exposures for up to four years. Yet like some currency pairs, his ability to hedge the risk of price moves is complicated in some markets because there is no tradeable commodity derivative which matches the exposure. Pilsner is brewed with Czech barley, yet hedging is impossible because there is no direct correlation between Czech barley and the main tradeable grains, unlike rival brewers which can use Chicago Board of Trade or US barley indexes to hedge their exposure. “We buy direct from Czech farmers and use tradeable grain prices (MATIF wheat and CBOT for corn) as a guide in terms of procurement, but we can’t do a barley hedge as such,” he says. It’s the same in Romania, where heritage beers are also brewed with Romanian barley.

Inflation is another worry, currently manifesting around the spike in wages, transport costs and rising aluminium prices for cans. But here, at least, Buchanan’s hedging strategy is reaping dividends. Aluminium prices have risen from US$1,600 to around US$2,400 a tonne in a fast trajectory, the brewer could never have reacted to in the commercial market by hiking beer prices. Luckily, the team locked in lower euro prices based on aluminium levels up to four years ago. “It is really competitive when you look at the market now,” he says with relief. “A third of a cost of a can is aluminium.”

Having hedges in place has allowed the company to avoid any knee jerk price response in a tricky COVID-era market, giving the business time to react to inflationary pressures and a little slack in the budget. As for PET (polyethylene terephthalate) within packaging, the company doesn’t hedge even though there is opportunity to do so. “We decided it wasn’t the right thing to hedge plastic: the right thing is to move out of PET,” he says, turning the conversation to Asahi’s sustainability drive, increasingly informing treasury strategy.


Visible is treasury’s support of the group’s bid to buy local players to produce as close to the market as possible. “Exporting beer is expensive and not particularly sustainable,” he says.

Going local went further still, when his department supported one of the company’s key suppliers seeking to build a factory closer to an Asahi’s brewery and cut its logistics costs. The strategy involved setting up a supply chain finance solution with one of Asahi’s banks to ensure the supplier could discount its invoices, supporting its working capital requirements. “Trucking empty cans to a brewery is expensive.”

Elsewhere, he and the team are exploring longer-term green energy contracts. Asahi has just signed a ten-year electricity contract in Poland wholly tied to wind, in an offtake deal that helped the renewables farm finance its infrastructure build. “We had to hedge account it,” he explains. “We helped the process by ensuring the guarantees required were priced correctly, and that we had approvals and tax sign off. We did a green energy hedge to provide enough documentation to ensure our auditors were comfortable with the reporting.”

In other initiatives, treasury is now supporting the company in its efforts to use less plastic in its packaging and has explored green bond and green overdrafts – although he has no need for extra financing just yet. “We are sitting on excess cash, even after dividends.”

Supplier financing

The inability to hedge barley prices in Romania and the Czech Republic makes long-term contracts with farmers essential. Key relationships treasury nurtures and supports with Asahi’s procurement department wherever it can. Most visibly via a payables programme comprising vanilla supply chain finance for key suppliers, offering favourable payment terms with efficient discounting. It reflects his department’s proximity to the inherent weather vagaries and farming fundamentals of the business. “The weather impacts our business on both sides,” he says. “A rainy summer hits the grains and commodity markets, and also dampens peoples’ appetite to drink.”

As for the “other side,” treasury has just stepped into receivable financing for the first time, taking advantage of a new, competitive edge in accelerating receivables in certain markets. It lies in the burst of supermarket sales due to lockdown, he explains.

The company has never developed a programme on the receivables side, mostly because the market segments, especially pubs with typically higher credit risk, have never looked that attractive to financing banks. Now, with a lockdown-triggered pick-up in supermarket beer sales, banks have grown more willing to offer the company a discount if it wants to accelerate the cash on receivables to big supermarket chains like Tesco or France’s Carrefour and in markets like Poland, characterised by significant supermarket sales. Bank appetite has also been piqued by “cash being cheap” and lenders looking to make use of the excess funds they are sitting on, he adds.

“For pubs, payment terms are short at around two weeks, but supermarkets have much longer payment terms, and we are looking at opportunities in some markets to set up receivables programmes. We have found some quite interesting programmes in the Czech Republic, Hungary and Poland that will generate additional cash for us to repatriate back to Japan.”

Centralised treasury

The need to keep abreast of the data and risk coming out of the business, volatility in financial and commodity markets, plus ensuring ample cash on hand to support the business and suppliers, has shaped Buchanan’s highly centralised team.

Centralisation and tight control certainly make budget setting much easier. A complicated and risky process at the best of times given the gap between setting the budgets and having hedging in place to guard against potential market moves. Currently looking at his exposures into next year, but with limited amounts of hedging in place, he explains how he uses the forward markets to help estimate where he thinks the all-in hedge will come in 2022. The process involves taking account of current hedges and doing a weighted average with the forward market to align the business needs with market prices.

“It’s challenging because some of these markets are controlled,” he explains. “In Romania the market appreciation is slower than the forward points. If I used this as the input price, they would set the prices too high and wouldn’t be competitive.”

Banking partners

His treasury has around ten to 15 bank partners with a notable Japanese bias, but in relationships that are still subject to shifts and changes in markets. Because the business doesn’t have any external debt, it doesn’t have the usual historical relationship of core bank financing in return for lucrative mandates. Instead, the company works with central European-focused banks that can support around FX, commodities and cash management. “We don’t have a massive exposure compared to some of our peers, but we need to ensure we get competitive pricing. We have around €600m in transactional FX against various local European currencies and some banks simply don’t have this exposure or skills set.”

Sounding a note of concern, he says the pool of banks able to offer commodity hedging is shrinking because of the regulatory and documentation burden. As for any changes in Asahi’s banking cohort, he doesn’t rule out the group introducing more banks to support its working capital agenda with skillsets specific to certain markets and growing Asian and Latin American exposures. However, prospective partners must offer value and avoid his pet hate of “constantly asking for meetings” but “never providing anything new.” Elsewhere, he says the company reviews the share of the wallet and always provides feedback to relationship banks if they don’t win the business, highlighting other areas where they could support the company.

Early career

It comes as little surprise that Buchanan was drawn to treasury because of its connection and proximity to the financial markets, a fascination he dates from early experience on a bank trading floor and in a junior treasury role focused on cash forecasting and shipping in an oil company. Later, at multinational drinks group Diageo, he got his first taste of the front office, helping run a volatile trading and hedging book (including interest rates) involving chunky risk and numbers. “I got really close to the market; we operated like a bank and had a P&L,” he recalls. “It was a great learning into the FX market which was my key area of focus.”

A career in treasury won over banking because of treasury’s reach across FX, M&A, tax or financing, or indeed other areas altogether. He is currently working with Asahi’s HR, exploring how to better rate and incentivise employees. “We are looking at employee goals and our review processes, seeing how they impact our bonus structure.” Elsewhere, he has been closely involved with a complex building project around new corporate offices, working with utilities, furnishings and builders. “You have these kinds of opportunities working with a corporate,” he says. “It wouldn’t be the same in a bank.”


Mentors have played an important role in his career progression and treasury philosophy. For example, his belief in a centralised treasury was ingrained during his ten years at SABMiller as Regional Treasurer Americas (and latterly Europe) reporting to inspirational Treasurer David Mallac. In a busy travelling role, Buchanan was tasked with getting to grips with regional treasurers’ cash assets, liabilities and currency exposures in the early stages of a sweeping centralisation strategy to persuade fiercely independent regional teams to come under one umbrella. “In those days we really weren’t wanted; there was a lot of push back.”

Success came when colleagues began to understand the value the central team was offering in an approach overseen and encouraged by Mallac. “He guided my relationships with individuals and situations.” It was during this time Buchanan also learnt the value of face-to-face relationships and the importance of demonstrating value.

His time at a Peruvian subsidiary experiencing volatile costs and “horrendous” FX moves with the power to wipe out months-worth of P&L, comes to mind. Over time he demonstrated that a new cost structure and control of the currency element could help the sales side of the business. Next, he explained the need to forecast exposures, attach governance, controls and install systems.

Buchanan also counts his father as another key mentor. A chemist by training but latterly an entrepreneurial property developer, he has always counselled his son on the importance of understanding how to add value to a business to foster growth. It is his words that still ring in his ear when he is promoting treasury projects, putting “what the stakeholder requires” centre stage. “You have to demonstrate why it is important to them.”

It is one of the key lessons he hopes his team (a front office of three with three sitting in a Prague back office) have garnered. He’s just obtained board approval to add two more staff but says the heavily automated systems and straight through process suit a small treasury. As for his recruitment priorities, he will seek candidates with market knowledge and interest in the business. “Some people work in massive companies and really don’t know what is going on.” Elsewhere, he will look for ambition, a desire to develop the role and says candidates will also need the confidence to interact with senior colleagues in finance. “It’s very easy to have conversations when everyone agrees. It’s much more challenging when everyone has different views.” The ability to switch off, particularly given lockdown’s legacy of long working days, is another prerequisite. For him relaxation comes on a mountain bike, spending time with his family and sorting out a 700-odd vinyl record collection. “I also enjoy relaxing with a beer.”

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