Japan: Change in legal definition of beer could give some boost to Japan’s stagnant market
The legal definition of beer in Japan changed on Sunday, April 1st, and the nation’s major breweries are looking to shore up their shrinking customer bases by introducing new products with a wider variety of flavors to shake up the stagnant market, The Japan Times reported.
Under the old definition, beers need to be made from water and hops and have a malt content of 67 percent or higher. But that has now been lowered to 50 percent, marking the first change in 110 years.
Furthermore, a wide range of items have been added to the approved list of secondary ingredients, which is currently limited to grains like rice, wheat and corn. The new ingredients include fruit, spices, herbs and flowers. Seaweed, oysters and bonito flakes are also included.
The change in definition gives beer makers more flexibility to produce beer with unique tastes and aromas and enables them to officially market the finished product as beer. Under the previous definition, such low-malt beverages were called happōshu (quasi-beer), and were cheaper because they were less heavily taxed.
For consumers, the crucial question is whether prices will rise with the change.
The answer — for now — is no. The government plans to make the higher tax on beer and the lower tax on happōshu and so-called third-sector no-malt beverages the same by 2026. This will take place by reducing the levy on beer and raising the tax on happōshu and third-sector beer in stages — which will bring the three closer to each other in price.
But for now, major beer makers are trying to take advantage of the change to introduce new products and appeal to younger consumers.
“The change in the legal definition of beer is a huge opportunity to revitalize the market,” said Jin Yoshioka, a spokesman for Asahi Breweries Ltd., which plans to start marketing Asahi Gran Mild, a new beer infused with lemon grass to create a lighter and fresher flavor.
“We will be working on experimenting with the newly approved ingredients and maximizing the technology we have to create innovative flavors,” he added.
“There’s no denying the beer market in Japan is fast declining. The price wars that took place between the major beer makers factored into that decline, and the exploration of new and unique beer flavors was hindered” because companies were so focused on lowering prices, said Tetsuji Otani of Kirin Co., which plans to release a new type of Grand Kirin beer flavored with coriander seeds and orange peel.
Shipments of beer and third-sector drinks by the five major domestic breweries have been declining for the past decade or so.
In 2017, the figure fell for the 13th straight year to 404 million cases, down 2.6 percent from the previous year.
Over the years, beer has become an “old guy’s drink, unappealing to younger people, which resulted in a stagnant market,” Otani said.
“The definition change is a great opportunity to make beer more accessible to younger generations,” he said. “We want them to understand that the world of beer is full of variety and flavor.”
But some experts are not so sure it will stimulate the market.
“We’re not expecting a major change in the beer market just yet, given that the change in definition simply means that what was previously sold as low-malt beer or happōshu will be sold as regular beer,” claimed a market researcher who wished to remain anonymous.
“However, we do expect the breweries to capitalize on this change to market new products,” he said, acknowledging that whether beer makers can boost sales will depend on their marketing skills.
03 April, 2018
