| A: |
First, could you define "low-malt beer?"
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| B: |
"Low-malt beer" uses the same materials and brewing process as regular beer, but is stipulated differently in Japan's liquor-tax law. First, only "malt, hops, rice, corn and starch, etc." may be used in "beer," and the law classifies anything using materials other than these as "low-malt beer." Secondly, the malt content is different. The law defines "beer" as having a malt content of 67% or more. If that content is lower, it is classified as "low-malt beer."
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| A: |
How different is the tax rate?
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| B: |
Beer with a malt content of between 67% and 100% would be 222,000 yen per k?, or 77.70 yen for a 350 m? can. Most of the low-malt beer brands currently on the market have a malt content of less than 25%. They are subject to a liquor tax of 105,000 yen per k?, or 36.75 yen per 350 m? can.
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| A: |
How much would the tax be for a low-malt beer with a higher malt content?
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| B: |
If the malt content is between 26% and 50%, the tax is 152,700 yen per k?, or 53.44 yen per 350 m? can. If it is between 51% and 100%, the same rate as for regular beer ? 77.70 yen ? is applied.
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| A: |
Am I right in thinking that "low-malt beer" is just beer with a lower malt content and that it is selling well because of the cheaper price?
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| B: |
That's right. If we compare the prices of a 350 m? can of ordinary beer and "low-malt beer," the former retails at between 170 and 230 yen, and the latter, thanks to the low tax rate, between 118 and 152 yen both for 350m? can, but is mainly sold for 145 yen.
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| A: |
Is the manufacturing process any different from regular beer?
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| B: |
No. The main ingredients are malt, hops, beer yeast and water. Rice, cornstarch and other secondary ingredients are used to adjust the flavor. Much of the malt used in Japan is made from barley imported from Canada. Hops are vines, and the flowers are used in low-malt beer. The golden grains, called "luplin," in the stems of the flowers produce the unique aroma and slight bitterness. Luplin helps coagulate and separate surplus protein to make the beer transparent, controls the multiplication of various bacteria to make the beer last longer, and produces more froth. Beer yeast is a microorganism that is 5-10 microns in diameter, and decomposes the sugars in the malt into alcohol and carbonic acid gas. The degree of alcoholic content, the aroma and the flavor differ according to the particular beer yeast used. Water, too, plays an important role in determining the taste of low-malt beer. Saccharification and fermentation of the malt juices change slightly depending on the quality and quantity of minerals in the water, which has an impact on the flavor. Therefore, it is important to try to find water that will create the flavor you are aiming for.
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| A: |
I've heard that low-malt beer originally had a higher malt content.
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| B: |
Yes. The first low-malt beer to hit the Japanese market, in 1994, contained 65% malt. When the tax rate for beers with a malt content of 50% or more was raised to the same level as regular beer in 1996, breweries developed new products with a malt content of less than 25%. They succeeded in adding a few touches to take advantage of the new tax system. |
| A: |
There are some imported low-malt beer brands. What is the breakdown between domestic low-malt beers and imports?
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| B: |
In 2000, 96% was domestic, with imports a meager 4%. An overwhelmingly large proportion come from four Japanese breweries (Kirin, Asahi, Suntory and Sapporo).
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| A: |
What is the breakdown between regular beer and low-malt beer, then?
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| B: |
During the period between January and August 2001, beer had a 69.1% share and low-malt beer, 30.9%. The figure for regular beer has been on the decline since 1994, while low-malt beer has kept on growing. This trend is expected to continue, with low-malt beer taking over the larger share.
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| A: |
It seems that a hike in the tax rate for low-malt beer is being considered.
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| B: |
In 2000, a similar plan was suggested, to raise the rate to the same level as beer, but it "foamed" away due to strong opposition from the breweries. The Ministry of Finance is trying to revive the tax increase plan. The revenue from liquor taxes for fiscal 2001 is estimated at 1,800 billion yen, and beer and low-malt beer are the cash cow, together accounting for 65% of that revenue. If the same tax rate were applied to low-malt beer as beer, it would add some 250 to 400 billion yen to tax revenues. About 40 yen would be added to the currently prevailing retail price of 152 yen, drastically reducing the gap with beer, which retails at around 228 yen. However, the plan is expected to meet strong opposition, since low-malt beer has already penetrated Japanese households because of its cheap price. So, it's probable that the size of the tax hike will eventually be reduced. |
| A: |
How about the price of imported low-malt beers?
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| B: |
The following table shows imports and CIF unit prices for low-malt beers between January and December of 2000.
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Imports(litre)
|
y/y()
|
CIF unit price (Yen/litre)
|
| South Korea |
29,428,786
|
221.2
|
68.6
|
| U.S.A. |
26,070,561
|
147.4
|
90.7
|
| Canada |
998,171
|
92.4
|
75.4
|
| Belgium |
458,857
|
224.5
|
135.9
|
| New Zealand |
306,050
|
57.2
|
77.9
|
| Netherlands |
158,558
|
108.8
|
59.1
|
| India |
75,491
|
90.9
|
126.2
|
| Germany |
71,454
|
0
|
80.2
|
| Australia |
22,620
|
0
|
79.0
|
| U.K. |
8,592
|
77.8
|
178.7
|
| Others |
4,752
|
0
|
unclear
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| Total |
57,603,892
|
174.1
|
79.4
|
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| A: |
A final question. What is the breakdown between imported beer and imported low-malt beer?
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| B: |
In calendar 2000, beer accounted for 33.9%, and low-malt beer, 66.1%, in terms of volume.
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| A: |
Really? I thought imported beer was much higher. I'm surprised. |
(November 19, 2001)
Produced with the cooperation of The Shokuryo Jyokai Shimbun - The Wines, Sprits & Provisions Newspaper
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