Liquor

April 2004

A wave of low-priced "beer-like" beverages released this spring by Sapporo Breweries Ltd. and Suntory Ltd. are off to a good start. According to statistics released Monday by the five major beer brewers, March shipments of beer and low-malt beer on a taxable basis dropped 4.7% on the year to 39.23 million cases (one case equals 20 633ml bottles). However, when sales of the new drinks are added, the figure is almost on par with that of the previous year. Sapporo's Draft One, a carbonated alcoholic beverage released in February, is brewed with protein from peas and is made to taste like beer. The liquor tax on this product is even lower than that on low-malt beer, and the price of a 350ml can is 125 yen before the consumption tax. Sales of this product reached 1.2 million cases in March, surpassing the 1 million mark for the second consecutive month. Suntory released on March 9 a blend of beer and shochu distilled from barley, and sold 700,000 cases that month. Because of lower liquor taxes, the product's suggested retail price is 130 yen for a 350ml can. The product is classified as a liqueur under the liquor tax law, and like Draft One is not included in the beer and low-malt beer statistics. The two largest beer breweries, Asahi Breweries Ltd. (2502) and Kirin Brewery Co. (2503), currently do not have any plans to release similar products. The new drinks can be said to have created new demand in the beer and low-malt beer market, which has been losing ground to the market for shochu products. (The Nihon Keizai Shimbun; April 13, 2004)