Japan: Beer companies shifting focus to regular beer

Beer companies in Japan are shifting the focus of their sales efforts from low-malt beer and “third-segment” quasi-beer to regular beer, in expectation of an upcoming tax reduction that would boost demand for regular beer, Toronto Star reported on January 15.

The number of beer shipments in 2015, announced on January 14 by major beer companies, increased 0.1 per cent from the previous year, the first rise in 19 years.

However, the total shipment volume of beer and beer-like drinks including low-malt beer fell for the 11th year in a row.

“We concentrated our resources on Kirin Ichiban Shibori beer, and the efforts have begun to bear fruit,” Kirin Brewery President Takayuki Fuse said at a briefing session on the company’s business plan held on Jan. 8. The volume of beer shipped by the company in 2015 increased from the previous year for the first time in 21 years.

Kirin Brewery had been strengthening its overseas business on the assumption that the domestic market was contracting. However, the company now attributes declining sales to a lack of focus on the domestic market. Last year, Kirin Brewery regained lost ground by, among other measures, investing about 100 billion yen (about $856,238,000) in advertising and promotions for its beer business.

Suntory Beer’s The Malt’s regular beer, which the company introduced in September 2015, was a major success, with shipments exceeding forecasts by more than 60 per cent.

In addition, when Sapporo Breweries improved the flavour and other aspects of its Kuro Raberu (black label) regular beer, its shipment volume increased from the previous year’s figure for the first time in 21 years.

Since the late 1990s, beer companies have been emphasizing low-malt beer and third-segment beverages, which are cheaper than regular beer due to a lower tax rate on them, to appeal to budget-minded consumers. However, the government and the ruling parties are considering reducing the rate for regular beer and raising that of beer-like beverages to create a unified liquor tax rate.

The demand for regular beer is thus expected to grow, and beer companies are beginning to see the regular beer market as an expanding avenue for competition.

20 January, 2016