The strategy behind non-alcoholic beer

August 7th, 2010 by Philip Brasor & Masako Tsubuku

To beer or not to beer

To beer or not to beer

If you’re a true beer lover, you probably think that the very idea of non-alcoholic beer is ludicrous at best, blasphemous at worst. However, in Japan right now the major brewers are actually propping up their businesses with non-alcoholic beers, which means that the relatively low price you pay for your suds is being subsidized by consumers who, for whatever reasons, prefer their grog without the high.

There are two main aspects of beer that contains no alcohol. The first, more obvious one is that people who drink it don’t get drunk, so after pounding a few they can drive (supposedly the reason it was developed), operate heavy machinery, have babies and meet the in-laws without making fools of themselves. The other, less obvious aspect is that if a beverage ‘s alcohol content is less than one percent, no alcohol tax is imposed. The three types of malt liquor — beer, happoshu, and so-called daisan (type 3) — all have taxes attached, with the amount depending on the malt content. Daisan has the least malt content and thus the lowest tax. The average price of a 350 ml can of daisan beverage is between ¥130 and ¥150. About ¥28 of that price is tax.

Right now, alcohol-free beer is selling for about the same price as daisan beer, but since there is no tax, the manufacturer makes theoretically ¥28 per can more than they do for daisan. What needs to be remembered is that production costs for all these beverages, whether they have alcohol or not, is about the same.

For most of the last year, sales of beer and beer-like beverages have been sluggish compared to previous years, but non-alcohol beer sales have skyrocketed since Kirin put on sale its new Free brand in April 2009. In the last eight months of 2009, Kirin shipped 4 million cases of Free, compared to 2.9 million cases shipped of all brands of non-alcoholic beer in all of 2008. Suntory has since put out All Free, and on Aug. 3 Asahi launched Double 0 (as in 0.0 percent).

For sure, beverage sales across the board have risen thanks to the recent hot weather. Last week alone saw a 20-30 percent increase in beer and beer-like beverage sales over the same period last year. But according to media reports, manufacturers see growth only in the non-alcoholic sector through to the end of the year.

When questioned about the windfall they are receiving from non-alcoholic beer thanks to the tax break, beverage makers say that they need to recoup money they spent for development, but there are also those who say the price should be kept artificially high, otherwise minors will buy it. By definition, non-alcoholic beer has no alcohol, so why should anyone care if minors drink it? The opinion may be that by letting minors drink alcoholic beer, you only get them thirsty for the real stuff. However, there’s another reason that no one really talks about. In truth, many beers that are called non-alcoholic still have a slight trace of booze. According to the law, if the alcohol content is less than one percent, you can call it non-alcoholic. So some of the non-alcoholic beer on the market will still give you a buzz if you drink enough of it. And I’m sure the kids already know that.


3 Responses

  1. Greetings from one of your many JT fans in Hawaii –
    My parents had non-alcoholic beer in Denmark in the 1950s. I’d guess the Europeans had a long history of making it.
    When we quit drinking alcoholic beverages 25 years ago, we began drinking German non-alcoholic beers with Italian, Jewish, and Hawaiian food (we can buy several German NABs in Hawaii, and introduced one of them to our local supermarkets). We prefer the drier one with food . . . it tastes something like Heineken.
    I’ve read that NAB accounts for some 20% of U.S. beer sales now. When we go to a Hawaiian party, we have a six-pack of NAB put in the cooler just for us, and we stay sober watching others get silly or aggressive. Takes a little getting-used-to, but not at all unpleasant. We drive home safely, and feel fine the next morning.
    So NAB’s for people who want the taste, but not the effect . . . like say, decaf coffee. Hope this is helpful.
    Best wishes for your continued success, and aloha!

  2. I think the buzz comes from the MSG in at least one of them. I have not checked all.

    I love the idea of a non-alcoholic beer but these are best avoided. They are shit mostly and remind me of the taste of battery acid.

    They are not even real beer with all its lovely hops and Vit B contents, just some awful chemical concoction.

  3. Would sell more if you could get 2l of it for 99Y.


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