Last week, Prime Minister Yukio Hatoyama ordered the tax ministry to review the alcohol tax system, specifically in relation to beer and so-called beer-like beverages. The announcement immediately sent the major breweries into a tizzy, since the likely outcome of such a review will be a higher tax for “Number 3-type” (daisan) beverages, which are responsible for most of the profits that alcohol manufacturers have enjoyed in the past year or so.
Though Hatoyama’s Democratic Party of Japan’s manifesto didn’t mention beer, the party’s policy, according to the Asahi Shimbun, is to look at the possibility of pegging the beer tax to a beverage’s alcohol level, which is the way liquor taxes tend to be determined overseas. At present, daisan beverages and happoshu are taxed at much lower rates than beer, even though the alcohol levels of all three are comparable. If the DPJ does peg tax rates to alcohol levels, then the prices of all three beverages will likely become the same or close to the same; a situation that would essentially render daisan and happoshu meaningless, since the only reason they sell so well is that they’re much cheaper than beer. A 350-ml can of daisan, for example, is on average about ¥80 yen cheaper than an equivalent-sized can of beer.