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The Craft

Changes to Japanese Beer: The Taxman Cometh

Understanding Beer in Japan: Taxes

Many travelers to Japan will notice how easy it is to get an alcoholic drink in the land of the rising sun, with most convenience stores carrying a wide selection of beverages for the masses to taste. Aside from canned chu-hai (a liquor combined with a mixer), Japan is also home to a massive beer and near-beer market. In total, the WHO estimates that in 2016 Japan experienced a per capita consumption of 7.8 liters of pure alcohol a year. However, looking strictly at beer, Kirin Holdings concludes that Japan is seventh in beer consumption globally in 2015 and produced 5.3 million kiloliters of suds in 2016, making it a top tiered country to explore the world of malt and hops.

However, in Japan the price of “beer” is almost as varied as the materials that can be used to make it. This variance is due to Japan’s taxation system for beer and near-beer drinks, which is based on the malt content of the drink. The higher the malt content, the higher it can be taxed at, raising the price to the consumer.

 

Definitions of Beer and Other Malty Beverages

From a legal perspective, beer is defined as using primarily four ingredients: Malt, Hops, Yeast, and Water. Brewers can also use rice, corn, kaoliang, potatoes, starch, or other sugars to brew as long as the malt ratio stays at 68% or above. Using anything outside of those ingredients, or having a malt ratio below 68%, automatically makes the drink a “Happoshu” or what is often referred to as near-beer / low-malt beer. There is a third category, Sparkling Liqueur, which is very low malt content and may have other additives included as well.

Japan taxes each of these drinks differently, with beer taxed at 77 yen per can, Happoshu at 47 yen per can, and Sparling Liqueur at 28 yen per can.

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Finding a BEER!

Finding a can of beer is not hard but there are some very important things to look out for. For one, all cans signify which category they fall under: beer (as defined here) lists either ビール (“Bi-ru”, beer) or 生ビール (“Nama Bi-ru”, draft beer), Happoshu displays 発泡酒 (“Happoshu”, low-malt / near-beer), and Sparkling Liqueur will show リキュール(発泡性) (“Rikyu-ru Happosei”, Foam-able Liqueur). Another thing to look out for when searching for a beer is the price; generally speaking, a 330ml can of beer would be around 200yen. Special seasonal beers or craft beers can have this price even higher, with some larger industrial manufacturers selling unique beers around 325 yen a can.

Examples of Japanese low-malt drinks, called Happoshu or known as "near-beer".

Examples of Japanese low-malt drinks, called Happoshu or known as "near-beer".

Changing the System

With the complex taxes on beer basically unchanged for years, price wars between manufacturers and a plethora of drinks that try to emulate beer flavor poorly have come to bear on the unsuspecting drinker. To combat this and to help drive domestic production, the Japanese government announced earlier this year of a gradual change in beer taxes starting in 2020. By 2026, the tax should be equalized among all genres to 54.25 yen tax per 330ml can, bringing the average price of a 330ml can of beer from 180 yen to 130 yen.

While these tax reforms can help manufacturers focus on flavor and not just price competitiveness for beers, they also mean that your favorite chu-hai will be taxed at 35 yen per 330ml can, compared to the current 28yen, giving many the perfect excuse to try a new brew.

The tax changes encompass other alcoholic beverages as well and are largely aimed at leveling the prices for alcoholic drinks across the board, enticing consumers to try beers or other drinks they would otherwise have skipped over due to price.

Delicious Kirin Ichiban Shibori on draft!

Delicious Kirin Ichiban Shibori on draft!

 

Stay tuned to BeerBeerBeerJP as we keep an eye on these and other reforms that affect beer and alcohol in Japan!

Let us know what beers you want to see made cheaper in the comment section below!