Japan: Japan’s brewers racing to develop new uniquely flavoured beers ahead of changes in tax laws

Japan’s craft beer makers and major brewers are racing to develop new uniquely flavored malt beverages to take advantage of pending changes in the nation’s tax law governing alcohol production, The Japan Times reported on June 9.

The use of fruits, spices and other ingredients such as dried bonito will be allowed in beer production starting in April 2018, following a change under the liquor tax law defining of what constitutes an alcoholic beverage.

Currently, beer ingredients are limited mainly to malt, hops, corn and rice. Beverages that include other materials are currently available, but they have to be labeled happoshu (quasi-beer).

Under the new definition, products using newly permitted ingredients can be categorized as beer unless the proportion of the ingredient to the amount of malt exceeds 5 percent.

Both regional craft beer makers, many of which are experienced at making unique products, and major brewers are moving to take advantage of the expanded definition, at a time when the domestic beer market has been slumping.

After the deregulation, “Suiyoubi No Neko,” a beverage made by Yo-Ho Brewing Co. in Karuizawa, Nagano Prefecture, using orange peel and coriander seeds will likely be reclassified as beer from happoshu.

“Labeling has effects on sales and brand images,” Yo-Ho Brewing President Naoyuki Ide said, welcoming the upcoming change.

Prices of products undergoing such reclassification are expected to remain almost unchanged, as many of these beverages use a lot of malt and will thus continue to be treated as beer in terms of taxation, industry sources said.

Kirin Brewery Co. also believes that diversity in beer ingredients will be a boon for the industry.

The company currently sells Daydream, a happoshu product using yuzu citrus fruit and sansho pepper.

“We want to make beverages with interesting tastes from such ingredients as konbu kelp and dried shiitake mushroom that are used to make dashi broth,” said Tomohiro Tayama, master brewer at Kirin Brewery.

The planned change in the definition of beer is aimed at encouraging new products using local specialties as a tool for revitalizing regional economies.

“We want brewers to try to make beer offering a wide variety of tastes,” a Finance Ministry official said.

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