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E-Malt.com News article: Japan: Four leading brewers intensify sales war over third-tier beer
Brewery news

Japan’s four largest brewing companies are intensifying their sales war over low-cost “third-tier beer”, The Japan News reported on February 18.

With a hike in the consumption tax rate looming in October that is expected to make consumers more budget-conscious, there has been a spate of new product releases and re-releases of old ones.

Asahi Breweries Ltd. released its newest third-tier beer — “Gokujo Kireaji” — at the end of January. The beverage is made with barley spirits and the company’s advanced fermentation technology in an effort to approximate the taste of regular beer.

While attending a sales event with actress Ryoko Yonekura, who has appeared in television commercials for the beverage, Asahi President Shinichi Hirano said the company aimed to sell 3 million 20-bottle cases per year.

The four companies expect to sell 397.5 million cases in the beer category overall this year, a 1.9 percent increase over last year’s sales.

This comprises 193.1 million cases of regular beer, a 1 percent increase; 48.8 million cases of low-malt beer, a 2 percent decrease; and 155.6 million cases of third-tier beer, a 4.3 percent increase.

Compared to regular beer, which contains at least 50 percent malt, taxes are lower on low-malt beer, which contains less than 50 percent malt, and third-tier beer, which is made by mixing spirits into low-malt beer or using non-malt grains as the main ingredient.

The liquor tax on a 350-milliliter can of regular beer amounts to ¥77, compared to ¥47 for low-malt beer and ¥28 for third-tier beer. Before taxes, the median price range of a can of third-tier beer is around ¥110, about 40 percent cheaper than regular beer.

When the consumption tax rate is raised in October, food and some other products will still be taxed at 8 percent, though this will not apply to beer products, which will be taxed at the increased rate of 10 percent.

“Consumers become more budget-minded, so the sales war over third-tier beer will become the main battlefield,” said Toru Miyaishi, a director and managing executive officer at Sapporo Breweries Ltd., echoing the views of many in the beer industry.

Suntory Holdings Ltd. plans to release its “Magnum Dry” as a third-tier beer in April. The company stopped selling this beverage as a low-malt beer about seven years ago.

Sapporo is also planning to release a new highly carbonated product called “Honkaku Karakuchi” in April.

Kirin Brewery Co. holds the largest share of the third-tier beer market at 37 percent. Its “Hon Kirin,” which went on sale in spring 2018, has been a big hit, selling about 9.4 million cases per year.

The company re-released the product in January with a higher German hop content and aims to increase sales by 50 percent.



19 February, 2019

   
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