Closed for 70 years: Oga takes on Japan's sake licence freeze with a special zone

Seventy years without new licences for the domestic market

In Japan, it is almost impossible to set up a new sake brewery. The Liquor Tax Act, citing the need to keep supply and demand in balance, limits new sake-making licences to cases such as the relocation or merger of existing breweries. A revision to the law in fiscal 2020 opened up new licences for sake made exclusively for export, but for sake sold within Japan no new entrants have been permitted for about 70 years. In an editorial on 4 September, the Akita Sakigake Shimpo, the local newspaper of Akita Prefecture, called on the government to review this restriction flexibly.

Oga’s “Sake Startup City” vision

The editorial was prompted by the fact that a sake-making plan drawn up by the city of Oga in Akita Prefecture (on the Sea of Japan coast of northern Honshu) has been certified under the government’s “Regional Industry Growth Plan”. Under this scheme, the national government certifies and supports plans for developing local industries drawn up by municipalities. Oga’s plan, centred on the city’s brewery Inaba to Agave, puts forward the “Oga Sake Startup City”. It will recruit young people from across Japan who want to make sake, or “craft sake”, a new category based on sake-brewing techniques that adds fruit and other ingredients. Alongside financial support, it will provide training in brewing techniques and management. The target is to create 50 sake-related jobs by fiscal 2036.

However, a regulatory wall stands in the way here too. Inaba to Agave currently makes export-only sake and craft sake, and in 2023 it joined Oga in proposing a relaxation of sake-making rules in a National Strategic Special Zone (a national scheme that eases regulations in specific areas only). Realising the plan requires the zone’s approval.

A shrinking domestic market and growing overseas demand

Sake shipments peaked at about 1.77 million kilolitres in fiscal 1973 and had fallen to about 380,000 kilolitres by fiscal 2024, while the number of breweries has dropped to about 1,500, less than half the peak. Meanwhile, the share of “tokutei meisho-shu” (premium designations such as junmai and ginjo, which meet conditions on ingredients and rice polishing) is growing. Overseas demand is also picking up, and the inscription of “traditional sake-making” on UNESCO’s Intangible Cultural Heritage list is seen as a tailwind. The editorial points to beer, where small-scale production was permitted and distinctive craft breweries sprang up across the country, and argues that sake, too, needs new people.

What European readers should note is that, because of this regulation, anyone newly starting to make sake in Japan can only choose between “export-only sake” and “craft sake”. That means you may well encounter the work of new brewers abroad before you do in Japan. If you spot “craft sake” or the name of a new brewery in an importer’s description or on a label, pay attention to how fruit and other added ingredients layer onto the character of the sake as you taste it. Whether Oga’s special zone is approved looks set to be a litmus test for how diverse sake’s future makers will become.