Japan: Starting this month, 350-milliliter cans of beer and low-malt happoshu will cost 4 to 11 yen more at the store. The rise is the result of a ripple effect, Asahi News Agency said on January 1, 2005. Wholesalers will no longer be getting so-called incentive money, or rebates, from beer makers to pump up sales. Wholesalers have been using these rebates to keep prices artificially low to retailers. Without this infusion from makers, wholesalers will be forced to pass on the added cost to retailers, they added.

One consequence of the rebates has been a shakeout in the wholesale industry, as everyone struggled to cut prices. Over the past 10 years, the number of wholesalers has dropped by half, from about 1,800 to 900, they said. The rebates were a huge incentive for wholesalers to purchase large quantities of beer and happoshu from makers.

Wholesalers and retailers are currently negotiating the timing and size of the price rises at outlets, the sources said. According to the sources, the retail price of beer will likely rise by 6 to 11 yen, while happoshu will get 4 to 8 yen pricier.

Major supermarket chains such as Daiei Inc. and Seiyu Ltd. are expected to raise the retail price of beer and happoshu around Jan. 20. Small and midsize liquor shops are likely to do so sooner.

However, some major supermarket chains, such as Aeon Co. and Ito-Yokado Co., are resisting the pressure to raise retail prices. Aeon Co. is the operator of the Jusco supermarket chain.

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