Beer is the most popular alcoholic beverage for casual drinking and at social events in Japan. The industry developed rapidly in the last century with the help of trained brewers from overseas and the founding of three of the four of todays industry leaders. Although the country is renowned for its
. The Japanese beer market is rigid, with the four major breweries Asahi Breweries, Kirin Brewery Company, Sapporo Brewery, and Suntory Beer forming the industry. The
has been increasing, but craft beer production is mostly operated as a local side business by beer halls, restaurants, and other liquor manufacturers.
Tax loopholes driving the innovation of “beer”
Pale lager beer is at the center of Japan’s beer market. The
most popular beer brands are pilsner-style beers, with Asahi’s flagship product “Super Dry” leading the competition. A heated price war from the 1990s onwards drove innovation in the industry and birthed a new category of beer-like beverages. The leading brewing businesses focused on
low-malt beer (happoshu) in an attempt to reduce retail prices. According to liquor tax laws, “beer” is made by fermenting malt, hops, and water, with a limited ratio of secondary ingredients allowed. As the malt content of at least 50 percent (formerly 67 percent) is a defining criterion for taxation, beer brewers lowered the malt content below the threshold and increased the ratio of secondary ingredients to market the product as
happoshu at a lower tax rate. Another beer-like beverage known as “new genre beer” or “malt-less beer” followed in response to higher tax rates on
happoshu in the 2000s. Brewed either without malt or as a mixed drink made from
happoshu and spirits, the liqueur-type alcoholic drink became a low-priced alternative to beer.
The future of beer-like beverages
Although the years of steady growth in the beer-like beverage segment have passed, these beverages shape the present-day beer market in Japan.
Consumers’ drinking patterns show that a combination of beer,
happoshu, and new genre beer is not uncommon. However, liquor tax revisions are in progress to gradually align the tax rates by 2026 and remove the price advantage of beer alternatives. The revisions are expected to impact Kirin Brewery and Suntory Beer significantly, as
happoshu and new genre beer account for a significant share of the companies’ brand portfolios. Meanwhile, Asahi generates the majority of
its revenue in the alcoholic beverage segment through beer products, while beer-like beverages constitute a 20 percent share. While the dominance of the four breweries is undisputed in the Japanese market, the streamlined taxes in favor of beer force the companies to rethink their product lines.
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