This paper provides an analysis and a brief historical overview of the development of Japanese beer industry, encompassing both microbreweries and the major brewing companies that have been dominating the market. The growth of beer sector has been accompanied by the development of sectoral tax and regulatory policy. Reviewing the long-term trend of beer industry and of relevant taxation/regulations through macro-perspectives and detailed case studies, we found that the protective licensing policy and high burden of taxation have historically favored large firms, although the deregulation of 1994 enabled the naissance of microbreweries. Nonetheless, microbreweries, facing severe price competition and low profitability, are found to be on the decline over the past two decades. Craft beer has become a boom in Japan since 2014; however, major four breweries started to enter the craft beer market, leaving microbreweries’ future situation unpredictable.
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The expressions of M# (1868–1912), T# (1912–1925), S# (1925–1989), and H# (1989–present) in parentheses signify the year according to the Japanese era name. All Japanese governmental systems use only this year–era expression; therefore, we use the Japanese era name with the Western calendar.
See Asahi (1990) and Kirin Holdings Company (2015).
The modern tax system in Japan was based on taxation defined according to consumers’ tax-bearing ability. Luxury goods such as jewelry, cars, or fur, which were targeted to consumers with higher disposable income or accumulated wealth, had higher tax rates levied on them than for essential goods. This commodity tax for luxurious goods was maintained until the introduction of a consumption tax in 1989 (H1).
Generally, liquor shops used beer as a loss leader to attract their customers. Furthermore, beer was usually consumed only in summer; therefore, it was sold at a dramatically reduced price at the end of the season (Ninomiya 2016).
It is comprehensible that collecting small amount of tax from small breweries involves cost and times.
The taxable volume refers to the quantity of alcoholic beverages used as a basis for determining the amount of tax to be paid.
When Japanese order beer for toasting, they say, “firstly beer, please” or “nama, please.” without specifying a brand.
Statistically, the number of shops refers to the number of licensed sites.
Some convenience store franchises, such as Seven-Eleven Japan, incorporated liquor shops into franchisee holdings by including sales licenses for alcoholic beverages, which led to the early growth of these chains. The sales of franchisees with alcoholic beverages sales licenses were higher than for other convenience franchisees (Seven-Eleven Japan, 1991, pp. 50–53).
Concurrently, the government increased liquor taxes except whisky and mirin (traditional sweet cooking sake).
At that time, there were no technical books about brewing in public, and major breweries did not open the brewing technology.
It was difficult to obtain clear evidence on this matter. However, many articles about ji-biiru suggest that microbrewers suffered from a consumer prejudice that their beer was just a low-quality product for purchase as a souvenir.
By legal definition, various kinds of malts such as barley malt, wheat malt, rye malt, roasting malt, are included in the same category. Nonetheless, although German-style wheat beer is categorized as beer, Belgian-style wheat beer using flavorings such as coriander and orange peel is not categorized as “beer,” but as happoshu by the Japanese liquor tax law.
In Kyoto, Kirin produced 100 hl per batch (with an annual production of 55,000 hl), which was one-tenth of the capacity of their mother plant. Although product packaging was done in the mother plant, according to Kirin’s estimations, the production cost in Kyoto was estimated to be twelvefold that of the mother plant, which had not achieved cost efficiency (Matzuzawa, 1995).
Tokyo Shoko Research (2010) received 90 valid responses from 120 ji-biiru makers.
From an interview with Mr. Shigeharu Asagiri on May 11, 2016.
For example, the results of the International Wine Challenge (IWC) or International Wine & Spirits Competition (IWSC) attract attention in Japan, which leads directly to sales.
This is the number of festivals listed on the BR navi website.
Although accurate data for craft beer pubs was not available, we used an app called Craft Beer Japan and searched a list of pubs provided by the Japan Beer Times website.
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Ninomiya, M., Omura, M. (2018). Government Regulations and Microbreweries in Japan. In: Garavaglia, C., Swinnen, J. (eds) Economic Perspectives on Craft Beer. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-58235-1_16
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