Kirin Holdings said today (13 July) that it has not reached a deal on a potential merger with local rival Suntory.

However, the Japanese conglomerate behind Australia's Dairy Farmers and National Foods did not deny talks between the two rivals.

Responding to a report in business daily Nikkei, Kirin refused to either confirm or deny rumours that it is in talks over a possible tie-up with Suntory.

Nevertheless, the group appeared to indicate that the door could be open for a deal. "Kirin and Suntory have already collaborated in various operational areas such as distribution and procurement. However, nothing has been resolved or reached an agreement in the area of business merger."

Although Kirin and Suntory operate primarily in the drinks sector, both groups also have some interests in the food industry. Kirin owns Australia's Dairy Farmers and National Foods while Suntory operates various health food brands - including Sesamin and Power of Nature - in Japan, where it also distributes Haagen Dazs ice cream.

Even if a deal was agreed, competition authorities in Japan could still move to block a deal. Kirin and Suntory combined would control around half of the Japanese beer market.