The Japan News by The Yomiuri Shimbun

Brewery war boiling over as tax hike looms

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Japan’s four largest brewing companies are intensifyi­ng their sales war over low-cost “third-tier beer.” With a hike in the consumptio­n tax rate looming in October that is expected to make consumers more budget-conscious, there has been a spate of new product releases and re-releases of old ones.

Asahi Breweries Ltd. released its newest third-tier beer — “Gokujo Kireaji” — at the end of January.

The beverage is made with barley spirits and the company’s advanced fermentati­on technology in an effort to approximat­e the taste of regular beer.

While attending a sales event with actress Ryoko Yonekura, who has appeared in television commercial­s for the beverage, Asahi President Shinichi Hirano said the company aimed to sell 3 million 20-bottle cases per year.

The four companies expect to sell 397.5 million cases in the beer category overall this year, a 1.9 percent increase over last year’s sales.

This comprises 193.1 million cases of regular beer, a 1 percent increase; 48.8 million cases of low-malt beer, a 2 percent decrease; and 155.6 million cases of third-tier beer, a 4.3 percent increase.

Compared to regular beer, which contains at least 50 percent malt, taxes are lower on low-malt beer, which contains less than 50 percent malt, and third-tier beer, which is made by mixing spirits into low-malt beer or using non-malt grains as the main ingredient.

The liquor tax on a 350-milliliter can of regular beer amounts to ¥77, compared to ¥47 for low-malt beer and ¥28 for third-tier beer.

Before taxes, the median price range of a can of third-tier beer is around ¥110, about 40 percent cheaper than regular beer. When the consumptio­n tax rate is raised in October, food and some other products will still be taxed at 8 percent, though this will not apply to beer products, which will be taxed at the increased rate of 10 percent.

“Consumers become more budget-minded, so the sales war over third-tier beer will become the main battlefiel­d,” said Toru Miyaishi, a director and managing executive officer at Sapporo Breweries Ltd., echoing the views of many in the beer industry.

Suntory Holdings Ltd. plans to release its “Magnum Dry” as a third-tier beer in April. The company stopped selling this beverage as a low-malt beer about seven years ago.

Sapporo is also planning to release a new highly carbonated product called “Honkaku Karakuchi” in April.

Kirin Brewery Co. holds the largest share of the third-tier beer market at 37 percent. Its “Hon Kirin,” which went on sale in spring 2018, has been a big hit, selling about 9.4 million cases per year.

 ?? The Yomiuri Shimbun ?? Actress Ryoko Yonekura, right, and Asahi Breweries Ltd. President Shinichi Hirano attend an event in Minato Ward, Tokyo, on Jan. 28.
The Yomiuri Shimbun Actress Ryoko Yonekura, right, and Asahi Breweries Ltd. President Shinichi Hirano attend an event in Minato Ward, Tokyo, on Jan. 28.
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