Japan will unify tax rates on beer-like drinks from October 1, cutting the levy on beer by JPY9.1 ($0.05) per 350ml while raising taxes on cheaper alternatives, Japan Today reported on September 24. The change completes a liquor tax overhaul rolled out in three stages since October 2020.

The reform ends decades of sharp tax differences between drink categories that shaped Japan's brewing industry, where manufacturers developed low-malt products specifically to qualify for lighter taxation. From October, all beer-like beverages will be taxed at the same rate of JPY54.25 per 350 ml.

Taxes on happoshu, or low-malt beer, and on "third-category beer" will rise by JPY7.26 per 350 ml. The levy on chu-hi, shochu-based highballs, will increase by JPY7.

Beer-like drinks in Japan are classified as beer, happoshu or third-category beer depending on ingredients and the share of malt used. Before the reform began, beer carried the heaviest burden at JPY77 per 350 ml, compared with JPY28 for third-category beer, a gap that has narrowed in stages.

Major manufacturers are revising shipment prices to match the new rates, and the adjustments are expected to feed through to retail prices.

The unification removes the incentive that drove Japanese brewers to create happoshu in the 1990s and third-category products in the 2000s, both engineered to fall outside the definition of beer and attract lower duty. Consumers who switched to those cheaper options will now face higher shelf prices, while standard beer becomes relatively less expensive.