New legal definition of beer: it’s anything goes (well almost)

Under the old definition, beer had to be made from water and hops and have a malt content of 67 percent or higher. But on 1 April 2018, when the new law came into effect, that was lowered to 50 percent, marking the first change in 110 years.

Furthermore, a wide range of items have been added to the approved list of secondary ingredients, which is currently limited to grains like rice, wheat and corn. The new ingredients include fruits, spices, herbs and flowers. Seaweed, oysters and bonito flakes are also included.

The change in definition gives brewers more flexibility to produce beers with unique tastes and aromas while still calling them “beer”. Under the previous definition, such low-malt beverages were called happoshu (quasi-beer) and were cheaper because they were less heavily taxed.

The government also announced plans to harmonise the excise load on beer, happoshu and the so-called third-sector no-malt beverages. But this will only happen by 2026. The scheme entails reducing the levy on beer and raising the tax on happoshu and third-sector drinks in stages, which should bring the three closer to each other in price.

Shipments of beer, happoshu and third-sector drinks by the five major domestic breweries have been declining for 13 straight years. In 2017, the figure fell to 404 million cases, down 2.6 percent from the previous year. Proper beer declined 2.9 percent to 205 million cases, while shipments of happoshu dropped four percent to 55 million cases. Sales of third-sector beverages dropped 1.5 percent to 144 million cases, according to media.

Whether the change in the legal definition of beer will stimulate sales is another matter. Because what was previously sold as happoshu will now be sold as regular beer.

Among the five major domestic breweries, Asahi has the largest market share with 39.1 percent, followed by Kirin (31.8 percent), Suntory (16 percent), Sapporo (12.1 percent) and Orion (0.9 percent).