Asahi Breweries announced yesterday that it plans to have a beer flavored alcoholic drink on the market by the summer. The product will be exempt from Japan's malt-incremental system of beer taxation.
In Japan, ¥78 of tax is levied on a can of beer. But, beers which contain less than 67 percent malt fall under the category of "happoshu", taxed at ¥47 yen a can. Containing no malt or wheat they escape classification as either, and are taxed at ¥25 a can.
Sapporo Breweries was the first company to create an entirely malt free drink when they last year launched 'Draft One', which has had phenomenal success in the country. It took considerable a market share from happoshu beers, with sales having exceeded 18m cases.
The new "third category beers" are made from yellow peas. Sapporo claimed that they did not originally develop the drink in order to avoid higher taxes but rather to create a "lighter tasting beer".
In addition to the tax benefit, the yellow pea beer is about 15 per cent cheaper to produce than happoshu. It retails at around ¥100 yen per can, ¥20 less than happoshu. The appeal to consumers is both in the price and innovative concept - a more defined advance in beer style than merely reducing the proportion of malt.
First introduced in 1994, happoshu beers account for about 40 percent of the malt drinks market in Japan. The Japanese Government raised taxes in response to their success against beer both in 1996 and 2003, claiming that "similar rates should be applied to similar products".
A review of alcohol taxes is expected to eventually bring the 'third category' into line with happoshu.
Asahi are keen to get their version to market before such a reaction. "We would like to unveil the new product as soon as possible," said Asahi President Kouichi Ikeda. Draft One has already sold around 14million cases since February 2004.