Low-malt beer (発泡酒)

Low-malt beer is a type of alcohol defined by the Japanese Liquor Tax Act. The Japanese Liquor Tax Act distinguishes beer from low-malt beer and beverages are classified as low-malt beer if they contains ingredients other than those stipulated for beer. Refer to Definition for further details. In this section, we will mainly explain low-malt beer, which has a lower tax rate than beer.

Definition

According to the Liquor Tax Act, Article Three, alcoholic drinks are divided into 17 kinds of drinks and 'other drinks' and the 17 drinks include 'beer' and 'liqueur,' and the classifications are defined below.

Beer
Beer is a fermented drink made from malt, hops and water.

Beer is a fermented drink made from malt, hops, water, barley, and other materials stipulated in government regulations. However, the total weight of the materials decided by government ordinance should not exceed 50-100th of the weight of the malt.

Set additional ingredients include rice, corn, sorghum, potato, starch, sugars, and caramel as a color additive.

Low-malt beer
Low-malt beer is a carbonated alcoholic drink made from malt or barley and it excludes drinks referred to in the Act Section Three, Articles No.7 to No. 17 and beverages that include distilled alcohol-based ingredients made of malt or barley.

Low-malt beer is classified into three kinds based on the tax system including low-malt beer containing 50% or more malt, less than 50% but more than 25% malt and up to 25% malt. In this section, low-malt beer containing less than 25% malt will be explained.

Liqueur
Liqueur is defined as a drink made from alcohol, sugar, and other ingredients (including alcohol drinks) and with an alcohol content two degrees or higher (it excludes alcohol drinks referred in the Liquor Tax Act, Section 3, Article No. 7 to No. 19; powdered substance which, by dissolution, can be made into a drink with an alcohol content of one degree or higher, according to the Act, Section 2, Article 1; drinks whose characteristics are recognized as similar to that of mirin (sweet cooking rice wine) in accordance with government regulations).

Other brewed beverages
They are defined as follows: fermented alcohol drinks made from grains, sugars and other ingredients (excluding alcohol drinks referred in the Act, Section 3, Article 7 to 18 and other government ordinances) with an alcohol content of less than 20 percent (the extracted component is two degrees or higher).

Other liquors
This includes drinks other than refined sake, synthetic sake, shochu (distilled spirit), mirin, beer, fruit wine, whisky, brandy, material alcohol, low-malt beer, other brews, spirit, liqueur and powder liquor.

Summary

The low-malt beer popular in Japan since the middle of the 1990s is mainly a kind of beer with a low malt ratio or beer-like alcohol drinks.

It is less expensive than regular beer and is often criticized as a 'bit inferior' such as lacking in taste or bitterness. On the other hand it is popular among women and light drinkers as it is lighter than beer.

While the sale of beer is on the decline, the low-malt beer market has been expanding and it has been a hot-selling product since its appearance. However, with the twice-amended liquor tax, it is not as cheap as it was compared with chuhai (a shochu-based beverage).

Alcohol drinks with a taste similar to beer appeared around 2003 are neither beer nor low-malt beer and are called "the third beer." They were originally sold by Sapporo Breweries Ltd. (Draft One) and by Suntory Holdings Limited (Super Blue) and one 350ml can is cheaper than that of low-malt beer by 10 yen or more. The alcohol drink called 'the third beer' is now sold by the four major beer manufacturers including Asahi Breweries which began selling its new product, 'Shinnama' (the name changed to 'Shinnama Three' later) on April 20, 2005 and Kirin Brewery which began selling 'Nodogoshi nama' on April 6, the same year. In addition, Suntory at last began selling 'Kireaji nama' as one of 'the third beers' on July 26, 2005.

Suntory's 'Super Blue' and 'Kin mugi,' Asahi's 'Gokuuma,' Kirin's 'Ryoshitsu Sozai,' Sapporo's 'W-DRY' and 'Southern Star' sold by Orion Beer Co., Ltd. are classified into 'liqueur,' because they are made from low-malt beer and spirits. (This type is also called 'the fourth beer'). Sapporo's 'Draft One' and 'Umainama' do not contain either barley or malt, but use 'pea protein' instead of malt. Asahi's 'Shinnama' (now 'Shinnama three') and 'Gubinama,' contain 'soy peptide' instead of malt or barley.
Kirin's 'Nodogoshi nama,' contains 'soy protein.'
Suntory's 'Kireaji nama' and 'Jokki nama' (original), contain 'corn.'
Low malt beer in which no barley or malt is used is classified as 'other brews (1).'

Beers which contain any ingredients other than barley, water, hops and other additional ingredients are classified as low-malt beer. As a result, beer which contain spices or herbs or fruit beer which contain fruit or fruit juice is used is classified as 'low-malt beer'.

Although low malt beer is particular to Japan, it is sometimes referred to as low malt beer or happoshu by the foreign media.

The definition of 'draft' in low-malt beer is "what is not heat-treated," and this is the same as the definition of 'draft' in draft beer.

History and background

The main factors in the development of low-malt beer were consumption trends, the high entry barrier for beer production, the high tax rate of beer, and the cost competition in beer production since 1989.

During the Pacific War, food shortages meant a shortage of barley and rice, the primary ingredients of beer from which breweries suffered. As such, Dai-Nihon Brewery spearheaded research into the development of alternative beers with less barley or even no barley.
The primary ingredients were sweet potato and hops; and composite beer was the equivalent of the present-day 'the third beer.'

After the war, some companies went into the production of low-malt beer, deciding not to produce beer because they could use less malt for low-malt beer and the entry cost and tax on low-malt beer was lower than that of beer. Drinks of that kind were produced and sold by several companies in the 1950s. However, many of them were withdrawn from the market within a few years. Liner Beer Co., Ltd. was sued by older beer companies based on the Unfair Competition Prevention Act and it is claimed that Liner's product was confusingly similar to beer and Liner was forced in effect to halt sales. In 1957, Takara Shuzo Co., Ltd. joined the beer industry but after facing an uphill battle, it withdrew from the beer business in 1967. Due to those factors, success in low-malt beer production and sales was considered difficult, and the low-malt business petered out for a while, although low-malt was defined by Liquor Tax Act, no companies entered low-malt business for a long time.

The product made by Asahi in 1983 was low-malt beer, a mixture of beer and juice and since it was colored like a cocktail and its alcohol content range was two percent, it was sold as 'a beer-type light cocktail.'
The TV commercial for this product featured three cats dyed pink, green, and purple playing in front of a white grand piano and this commercial was very popular in those days.

Suntory Chu-hi' sold by Suntory in 1984 was, as its name suggested, a mixture of beer and shochu (distilled spirit made from wheat) and is considered the root of today's classification of 'third beer classified into liqueur (sparkling)(1).'

Because of the relaxation of liquor sales licensing in 1989, large-scale discount stores were able to sell beer-type liquor. This led to a fall in sales at small liquor shops at suggested retail prices, (the usual sales route up to that point) and led to competition for lower prices among large-scale shops. That competition led to requests for wholesale dealers and manufacturers to lower prices. Originally, taxes accounted for 46.5% of the price of beer and it was difficult to lower the price.

In addition, since it was difficult to lower prices of domestic beer, the number of shops that began dealing with inexpensive imported beer increased rapidly, and this fueled a sense of crisis among leading breweries.

One way to lower beer prices was low-malt beer, which had been researched by the breweries.

The Liquor Tax Act in those days stipulated that beer included 67% or more of malt ratio and low-malt beer less than that. The tax rate on low-malt beer was set much lower than that on beer.

In the midst of that trend, in 1994, Suntory began selling low-malt beer, 'Hop's,' in which the malt ratio was reduced to 65%. In the next year, Sapporo Breweries Ltd. began selling 'Drafty,' in which the malt ratio was less than 25%, and set its price lower leading to full-scale competition in low-malt beer.

Although low-malt beer was considered to be less tasty than beer, its low cost yielded results and it sold well. However, because beer lost sales, the government revised the alcohol tax in the fall of 1996 so that the tax for low-malt beer containing 50% or higher malt was raised to match that of beer. It was a revision targeting low-malt beer and major breweries were strongly against it, saying that the revision neglected the value of their product development.

In May, the same year, Suntory began marketing 'Super Hop's,' in which the ratio of malt was less than 25%, in response to that Fall's revision of the Liquor Tax Act.

In 1998, Kirin Brewery entered the low-malt beer market for the first time by selling 'Kirin tanrei nama' which was a huge hit, gaining a 50% market share and at the same time the low-malt beer market as a whole expanded a great deal.

In 2001, Asahi Breweries, Ltd. entered the low-malt beer market for the first time by selling 'Hon nama (now, Hon nama Draft).'
Until that time, Asahi Breweries, Ltd. had said, 'We will not sell low-malt beer, which is only an imitation beer'.
However, when Asahi started their sales, they said, 'The category for low-malt beer has clearly been established.'

In 2003, the Liquor Tax Act was revised again, and low-malt beer was raised by 10 yen. That revision led to the study for alcohol drinks with lower taxes, and to the development of the third beer. The tax rate of the third beer was also raised in 2006.

In December 2008, it was reported that the so-called third beer would overtake low-malt beer in sales volume.

Tax rate

Tax rate since May 1, 2006. This amount is applicable to one liter.

Low-malt beer
containing 50% malt or more
222 yen
containing less than 50% but more than 25% malt
178.125 yen
containing less than 25% malt
134.25 yen
(reference: beer-222 yen)