Japan, Tokyo: Asahi Breweries Ltd. announced on February 2 that it will launch a beer-like alcoholic beverage subject on April 20 to lower liquor taxes for which retailers will be able to set lower prices, according to Kyodo News. Asahi Brewery will release Asahi Shin-Nama third-category beer, made of soy protein and containing no malt. The product's price is open, but is likely to be set around 120 yen per 350-ml can, about the same as the price of similar products offered by Sapporo and Suntory.

Asahi aims for annual sales of 22 million cases of the new product by December 31, 2005. One case holds 12.66 liters, or the equivalent of 20 633-ml bottles. That would account for about 10% of Asahi's targeted beer sales this year. For 2005, Asahi is aiming for a 2.9% rise in overall beer sales to 210 million cases. Asahi's senior managing director Masaaki Okada said, "We hope to obtain the top market share" in the beer-taste beverage product segment, which is often dubbed the "third beer" market.

Sapporo Breweries Ltd. and Suntory Ltd. have already launched similar products in the so-called "third category" of beer. Kirin Brewery Co. plans to follow the suit by April. Sapporo Breweries Ltd., of Sapporo Holdings Ltd. (2501.TO), has had huge success since its February 2004 introduction of "Draft One." The product doesn't contain malt or wheat, so it is categorized as neither a regular beer nor a " happoshu" beer, freeing it from Japan's high taxes on beer. While Draft One carries a tax levy of Y24.20 per 350-milliliter can, a low- malt "happoshu" brew, which is already cheaper than regular beer, shoulders a much bigger liquor tax of Y46.99.

Sales of "third beer" products, currently brewed by Sapporo and unlisted Suntory Ltd. (SNT.YY), made up about 5% of the entire beer market in 2004. With Asahi and Kirin Brewery Co. (2503.TO) set to join the fray this year, beer company officials expect that ratio to reach 10% or more for 2005. Suntory, which bottles and distributes PepsiCo Inc.'s (PEP) products in Japan, aims to boost its "Super Blue" sales to 10 million cases for 2005.

Intensifying competition among major Japanese breweries may fuel discussion about the government's considering to overhaul the liquor tax system to raise the tax on the third-category beer. Prices of third-category beer products can be cheaper than conventional beer and "happoshu" low-malt beer products due to lower liquor taxes as they contain no malt. The taxes on such products are at least 50 yen lower than those on conventional beer products and 20 yen lower than on happoshu products per 350 milliliters.

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