The strategy behind non-alcoholic 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.
Tags: non-alcoholic beer