Japan, Tokyo: Japan’s four major beer producers expect overall sales in 2005 to be flat or lower on the year due to effective price hikes and a decline in the drinking population. As a result of recent reforms such as the elimination of rebate structures, prices are expected to rise, Asia Pulse commented on January 14. A drop in alcohol consumption among young adults and the overall decrease in drinkers is also poised to depress overall sales.

Asahi Breweries Ltd expects sales to remain flat or dip slightly, while Kirin Brewery Co and Sapporo Breweries Ltd both anticipate 3% falls. Suntory Ltd forecasts a 2-3% decline. But all except for Sapporo are setting their sales targets for this year higher than in 2004.

In particular, the four companies plan to aggressively market low-priced "third beer," which for tax purposes is not classified as ordinary or low-malt beer. With demand for third beer growing rapidly, Sapporo and Suntory are aiming for double-digit growth for these products.

Kirin hopes to sell 19.7 million cases, with each holding 20 large bottles, as it seeks to grab the top spot in the market. Asahi is also expected to map out a bullish sales projection.

But increased sales of third beer products are expected to steal some thunder from low-malt beer. All except for Asahi are setting their low-malt beer sales goals lower on the year. And with liquor tax revisions being considered for fiscal 2006, the beer makers will likely be forced to overhaul their business strategies.