MARKETS
HISTORY
Japan – a beer-loving nation, part 2: The fight for shares in a limited market Michaela Knör (Axel Simon Library, VLB Berlin)
As we discussed in the first part of this article (Brauerei Forum 3/2020, p. 22), the Japanese beer market in the 1980s was dominated by four major breweries: Asahi, Kirin, Sapporo and Suntory. The Big Four were fighting for shares in a largely saturated Japanese market. This led to the question: How do you stand out from the competition and secure a bigger slice of the highly coveted pie?
of the “Dry Wars.” In the course of this “war” one front-line battle in particular stood out: the lawsuit Asahi filed against Kirin. The design of Kirin Dry had been based on Asahi Dry. Kirin had to backpedal, but recovered with a highly successful counter-attack in the form of Kirin Ichiban. In total, the breweries launched a variety of dry beers, though the most they managed to achieve by doing so was to slow down the Asahi Super Dry victory parade, as the flood of new dry beers on the market led to the competition essentially eating itself.
The product is ubiquitous. According to its own information, the brewery fills 1500 cans per minute
One way of securing market shares was through new products. The Asahi brewery took this approach back in the 1980s, experimenting with the production of a particularly dry, highly attenuated lager. The product, not unlike a light pilsner, was launched by Asahi 1987 under the brand name Asahi Super Dry. This saw Asahi double its market share, causing heavy losses to Kirin and the other brewing giants. But Asahi's rivals soon followed suit, jumping on the dry beer bandwagon with Kirin Dry, Sapporo Dry and Suntory Dry. The result was a real ding-dong battle, which has now come to be known as the time
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Brauerei Forum International – May 2021
Low-malt beers Another tactic adopted by the breweries in their effort to secure market shares was to develop a beer-like beverage that could be sold at a lower price due to its lower malt content. In accordance with Japanese law at the time, beer (biiru) had to contain at least 67 % malt, and was subject to a tax of 40 %. Alcoholic beverages with a lower malt content and those based on other raw materials were taxed at a lower rate. It is worth noting at this juncture that the alcohol taxation laws in Japan are unusual in that beer, despite being relatively low in alco-
hol content, is taxed more heavily than high-proof products such as whisky and sochu. In 1994 Suntory launched Hop’s Draft, a drink that, while it could not be officially termed “beer” due to its 65 % malt content, was nevertheless very similar to beer in appearance and taste. This drink, known as “happoshu” (literally: “foaming alcohol”), was very popular among Japanese beer drinkers and could be sold at a lower price due to its lower taxation. But once again, it wasn’t long before the other breweries came up with competing products. In response to this influx of “beer-like drinks”, the law was changed so that all happoshu products with a malt content of up to 50 % would be taxed at the same rate as beer. This was followed by different tax brackets for products with a malt content of 25 to 50 % and less 25 %. As a result, the breweries kept on reducing the malt content of their “low-malt beers” further and further. The majority of happoshu with a malt content of less than 25 % produced today tastes far less like beer than the products brought out at the beginning of this trend. Nevertheless, they have successfully established their own corner of the market thanks to their low price. In 2017, happoshu accounted for 27 % of Kirin’s product range, and 9 %
