Japan liquor tax reform unifies beer and third-segment beverage rates

Japan is implementing a liquor tax reform on October 1, unifying the tax rates for beer and beer-like beverages (known as third-segment beer and happoshu). Under the new system, the tax on beer will decrease by approximately 9.10 yen per 350ml can, while the tax on third-segment beer and happoshu will increase by approximately 7.26 yen per 350ml can. RTD (Ready To Drink) beverages, such as canned chu-hi, will also see a tax increase from 28 yen to 35 yen per unit.

Major beverage manufacturers are responding to the narrowing price gap by reclassifying products. Companies including Suntory, Asahi, Kirin, and Sapporo plan to transition flagship third-segment brands like “Kinmugi,” “Clear Asahi,” “Honkirin,” and “Mugi to Hop” into the official beer category. This shift is expected to drive a “return to beer” as the cost advantage of lower-taxed alternatives diminishes.

While the tax cut on beer aims to benefit consumers, many restaurants and hotels report that rising costs for ingredients, labor, and utilities mean they will not pass the savings on to customers through lower menu prices. Meanwhile, retailers have seen a surge in “panic buying” of third-segment beverages and happoshu ahead of the tax hike.