Japan: A plan to increase tax on beerlike beverages similar to low-malt happoshu beer - so-called type three beers - is set to be postponed, according to officials of a Liberal Democratic Party tax panel, Yomiuri Shimbun said on December 3.

The tax hikes were to be included as part of taxation reforms planned for fiscal 2005. But senior officials of the ruling coalition party's Research Commission on the Tax System hardened their position against tax increases at a meeting held Thursday.

Type three beers are excluded from the tax categories for beer and happoshu because they use unorthodox ingredients such as pea protein instead of malt, or mix beer and happoshu with shochu (distilled spirits). The best known such drink is Draft One, produced by Sapporo Breweries Ltd.

Sapporo has strongly opposed any plan to increase the tax levied on such beverages.

"The move to impose stiffer taxes on these drinks was aimed squarely at our Draft One," a Sapporo official said. "It would have meant all of our efforts (to produce the drink) would have been for nothing."

But the panel rebuffed claims that it was merely trying to levy taxes every time a new low-priced product was developed. Rather, the panel reached a general agreement to revise the entire liquor taxation system, rather than focus on individual beverages.

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