Unified Alcohol Tax Set to Reshape Japan's Beer Market

For a long time in Japan, beer-like drinks were split into three groups according to how they were taxed: “beer”, which uses a high proportion of malt; “happoshu”, which uses a lower proportion of malt; and the “new genre” (also known as the “third beer”), made from ingredients other than malt. Products at affordable prices gathered in the lower-taxed categories, and each company competed by assigning different price ranges to each category. The liquor tax reform of October 2026 has unified the rates for these three. Asahi Breweries, one of the industry’s largest players, expects the shape of competition in the market to change significantly.

Beer taxed less, happoshu and new genre taxed more

According to the explanation Asahi Breweries gave at a presentation on 29 May, the unified tax rate cut the tax on beer by 9.1 yen per 350 ml can. Happoshu and the new genre, on the other hand, face a tax increase of 7.26 yen per 350 ml. If each company passes these changes straight on to shelf prices, the price gap between beer and the new genre will narrow. The company’s view is that consumers will increasingly decide not by “which category” but by “which brand”.

“In the end, it is a battle between brands”

Tsuyoshi Furusawa, Managing Executive Officer and head of Marketing at Asahi Breweries, said that brands in the beer price range have a big opportunity, because beer becomes more affordable than before. He stressed, however, that the company must raise the value of its brands rather than rely on the tailwind from prices. The company’s flagship product, Asahi Super Dry, launched in 1987, created a new trend of crisp, dry “dry beer” and has underpinned the company’s growth ever since. The new brand strategy is also seen as a fight to defend its position at the top.

Popular new-genre products move into “beer”

Not everything is a tailwind for beer, however. Triggered by the tax reform, some products previously sold as new genre have switched to the beer standard. Asahi Breweries has said it will make Clear Asahi a beer, and Suntory’s Kinmugi and Kirin Brewery’s Hon-Kirin have announced the same approach. With big, affordably priced favourites entering the beer arena, competition in the beer market looks set to intensify further.

For European readers, this development is worth watching as a turning point in how Japanese beer is designed for flavour. Once the categories that the tax system shielded disappear, companies will have to be chosen for taste and brand character rather than price. If you get the chance to drink a Japanese lager, pay attention to its crispness, bitterness and malt body. The dry style pairs easily with Japanese dishes such as sushi, tempura and yakitori.