January 13, 2005

The Tax Man

Japan has fairly high tax rates on beer — 78 Yen or about 75 US Cents per can of beer.
The interesting thing is that the Japanese Government does not tax the amount of alcohol, they tax the amount of malt used in the beer. The ¥78 per can for all malt beer drops to ¥25 for a can of alcoholic beverage that contains no malt.

Brewers are rising to the challenge as reported at BeverageDaily.COM:

Asahi joins Japan’s fake beer revolution
Asahi Breweries is to become the second brewer to start production of a malt and wheat free, “beer flavoured”, alcoholic drink.

Asahi Breweries announced yesterday that it plans to have a beer flavored alcoholic drink on the market by the summer. The product will be exempt from Japan’s malt-incremental system of beer taxation.

In Japan, ¥78 of tax is levied on a can of beer. But, beers which contain less than 67 percent malt fall under the category of “happoshu”, taxed at ¥47 yen a can. Containing no malt or wheat they escape classification as either, and are taxed at ¥25 a can.

Sapporo Breweries was the first company to create an entirely malt free drink when they last year launched ‘Draft One’, which has had phenomenal success in the country. It took considerable a market share from happoshu beers, with sales having exceeded 18m cases.

The new “third category beers” are made from yellow peas. Sapporo claimed that they did not originally develop the drink in order to avoid higher taxes but rather to create a “lighter tasting beer”.

In addition to the tax benefit, the yellow pea beer is about 15 per cent cheaper to produce than happoshu. It retails for about ¥100 yen per can, ¥20 less than happoshu. The appeal to consumers is both in the price and innovative concept – a more defined advance in beer style than merely reducing the proportion of malt.

And of course:

A review of alcohol taxes is expected to eventually bring the “type threes” into line with happoshu.

Insert obligatory Yellow Pea joke —>here<—

Posted by DaveH at January 13, 2005 09:03 PM | TrackBack
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