Eat the rich, or tax the drunk?
What booze policies across the Pacific portend (or don't) for American beverage alcohol
The boozeletter is primarily concerned with drinking in America, as it says right there on the masthead. But so many things that Americans hold dear actually hail from elsewhere, thanks to the grim realities of militarized global capitalism1, plus the simple fact that people in other countries come up with a lot of cool shit that people in this country with a lot of money like to buy. On any reasonable ranking of nations whose own consumption habits presage our own, Japan would appear near the top: from style, to sushi, to the Nintendo Switch, Japanese products and practices have for decades powered trends that later resonate with rank-and-file Americans. Which is why I think it’s worth paying attention to a pair of related beverage-alcohol storylines emerging across the Pacific lately.
First up: like The Youths of America™, young Japanese consumers just aren’t drinking as much booze as they used to. We’re not talking about small discrepancies, either: “Just 7.8% of Japanese people in their 20s were regular drinkers in 2019 compared with 20.3% of that age group in 1999,” reports Reuters. That’s a huge drop! It’s not just the kids, either. Alcohol consumption amongst all drinking-age Japanese has been falling for years thanks to public education efforts, an aging population, and changing tastes, and as of 2020, per-capita guzzling was down to around 17.5 gallons a year, from 26.5 gal/year in the mid-’90s, according to national tax data reviewed by The Washington Post.2 The country’s mighty booze conglomerates have reacted by pushing further into the heavy-drinking North American market, with some making on-shore acquisitions and partnerships (Sapporo x Stone, Kirin/Little Lion x Bells & New Belgium, Beam Suntory x Boston Beer Company, etc.) Hell, Japanese market leader Asahi is lately signaling it may just bust in with its full portfolio, screaming “Oh yeah!” like the Rice Lager Kool-Aid Man. The firms are also bolstering their low-/no-alcohol offerings and touting big year-over-year percentage gains in that category—though always take those figures with a grain of salt, because N/A beers & wines tend to be mere slivers of their overall segments on a volume basis.
If you’re a public-health expert, this is good news, on account of alcohol being carginogenic poison, and all. But if you’re Japan’s National Tax Agency, it’s a problem for two compounding reasons: the country is currently carrying the largest debt load of any industrialized nation, and near beer and other forms of faux booze are taxed at lower rates than their intoxicating counterparts. Per The Japan Times (emphasis mine):
As of December 2021, liquor tax stood at ¥70 for beer, about ¥47 for happoshu, low-malt beer-like beverages, and ¥37.8 for so-called third-segment quasi-beer products per 350 milliliters. An official at the agency's Liquor Tax and Industry Division said that “many people probably drank at home rather than at izakaya and chose happoshu or third-category beer, which have lower tax rates.”
As a result, the country’s revenues from tax on booze are falling at raw-dollar amounts and rates not seen in three decades. Bloomberg’s in-country columnist pointed out that federal booze revenues in Japan are down nearly 50% (!!!) since peaking in the mid-’90s. So in July 2022, the country’s tax authority launched a nationwide contest to get young Japanese to brew up marketing plans plans to boost domestic sale of “sake, shochu, awamori, beer, whiskey, wine, liqueur, etc.” Entries just closed last week; in November the agency will select an overall winner at a “final tournament” in Tokyo, which will hopefully be staged as a zany gameshow (yet another cultural product that Japan has exported to laggard, unimaginative U.S. consumers.)
Naturally, “taxman asks for help boosting poison consumption to drive revenues” has not been an entirely popular development in whatever the Japanese equivalent of The Discourse is, drawing criticism from private citizens, activists, and doctors for the most obvious reasons imaginable. “In developed countries, it is considered a good thing for young people to avoid drinking, so only Japan is in the opposite direction. It cannot be ignored that alcohol is dangerous,” reads the Google Translation of a tweet from Tokyo-based journalist Karyn Nishi.3 She’s right: in contrast with, say, Ireland’s recent implementation of minimum-unit pricing4 to block Big Booze from selling bottom-shelf hooch below price floors set by the country’s health authority, Japan seems to be headed in the wrong direction on alcohol policy. Still, despite the backlash, Sake Viva! continues apace for now.
Some caveats here: I don’t speak Japanese and have only cursory knowledge of its politics, tax code, drinking culture, and so forth. Furthermore, Japan and the United States have vastly different social and regulatory landscapes: you can’t do a 1:1 mapping of what’s happening there onto what’s happening here, and I wouldn’t try. Still, I think the collision between Japanese consumer thirsts and the Japanese government’s fundraising efforts reveals a tension between private profits, government revenues, and public health that animates beverage-alcohol commerce and policy across the developed world—and here in the U.S. in particular.