Japan’s Liquor Tax Law

Just to clear up a few things about Japanese beers, here is a brief summary of

Japan’s Liquor Tax Law.

Japan’s Liquor Tax Law states that any alcoholic drink must have at least 1 percent alcohol content which means that beverages with less than 1 percent alcohol are not considered alcoholic drinks in Japan. The Liquor Tax Law classifies beer as happosei shurui or “foaming alcoholic drink” which is divided into three categories, namely beer, happoshu or “low-malt beer” and new genre. In addition, new genre has two subcategories, “other fermented alcoholic drink” and “liquor.” Let’s look at each category in more detail.

1. Beer: Made through fermentation using malt, hops and water. Other ingredients, specified by law, may be also added. Other ingredients allowed are mugi or “wheat/barley,” rice, corn, sorghum, potato, starch, sugars and caramel. Apart from hops and water, beer must have a malt content of 67 percent or higher. Alcohol content must be less than 20 percent.

2. Happoshu: Must have some malt or mugi content. Other ingredients are not regulated. Alcohol content must be less than 20 percent. Depending on its malt content, happoshu falls into three tax categories.

A. 50 percent or higher.

B. 25 percent or higher but less than 50 percent.

C. Less than 25 percent.

3. New Genre: Divided into two subcategories.

A. Other fermented alcoholic drink: Made through fermentation using food grains, sugars and other ingredients; however, it must not contain any malt. Has extract content of 20 percent or higher. Alcohol content must be less than 20 percent.

–Special tax rate applies if specific ingredients are used and alcohol content is below 10 percent. The specific ingredients are

a. Sugars, hops, water as well as soybean protein and yeast extract, or

b. Sugars, hops, water as well as soybean peptide, yeast extract and caramel, or

c. Sugars, hops, water as well as pea protein and caramel, or

d. Sugars, hops, water as well as pea protein, water-soluble dietary fiber and caramel, or

e. Sugars, hops, water as well as corn protein fragments, corn, yeast extract, brewer's alcohol, dietary fiber, flavoring, potassium citrate and caramel. 

B. Liquor: Composed of alcoholic drink and sugars and other ingredients (including alcoholic drinks). Has extract content of 20 percent or higher.

–Special tax rate applies if the alcoholic drink is a mixture of happoshu and spirits and alcohol content is below 10 percent.

Note: Without exception, all new genre drinks that I have come across so far fell under the special tax rate which is indicated on the can with this label (発泡性) (1).

Naming confusion 

In everyday speech, all these categories are conveniently lumped together and called beer regardless whether the speaker is aware of the differences among them or not. Meanwhile, the less beer savvy call all happoshu and new genre just simply happoshu. The more knowledgeable may call new genre daisan no biru or “third-type beer;” however, this naming is only partially correct. While all daisan no biru is new genre, not all new genre is daisan no biru.  The reason is that only the so-called “other fermented alcoholic drink” subcategory under new genre is daisan no biru. The “liquor” subcategory under new genre is called daiyon no biru or “fourth-type beer.” This term is rarely used in the media or in everyday conversation, but it does exist. Just to confuse you guys even more, another seldom used phrase is daini no biru or “second-type beer” which basically refers to happoshu.