Japan: Brewers raising “third-category beer” output ahead of tax hike

Major beer makers are stepping up the production of so-called "third-category beer," as they expect consumers to stock up on the beer-like sparkling drink ahead of a possible increase in retail price in line with a planned tax hike in May, Kyodo News communicated on April 15.

Behind the move is the memory of an about 30 percent surge in demand for "happoshu" low-malt beer in April 2003, ahead of a hike in the liquor tax for the product in the following month, officials of the makers said.

Kirin Brewery Co., the top producer of the third-category alcoholic beverage, is operating all its seven plants nationwide at full capacity without holidays, according to its officials. He wants to prepare to prevent shortages for consumers.

Sapporo Breweries Ltd., Asahi Breweries Ltd., and Suntory Ltd. have followed suit.
Part of their efforts to stimulate bulk buying include the introduction of larger cases, featuring 48 350-ml cans rather than the usual 24, who comes with free bonus gifts such as: snacks, cooking oil or other food items.

On May 1, the government will raise, as part of taxation reforms, the liquor tax for the third-category beverage by 3.8 yen per 350 milliliters, while that on regular beer will be lowered by 0.7 yen.

The third-category alcoholic drinks have posted brisk sales because they have been cheaper as a result of being taxed at a lower rate than regular or low-malt beer.

But after the tax hike, the brewers plan to raise their wholesale prices by 3.75 yen to 4 yen for a 350-milliliter can of "third category" beer. If the tax hike is entirely passed on to retail prices, a case of 24 350-milliliter cans of the third-category drink will be raised by 90 to 96 yen.