A high tax rate is to blame for remarkably expensive beer in Japan. Current taxation is 222 yen per liter, pushing the price of an ordinary 350-ml can of beer to 225 yen.
The economic recession beginning in the early '90s spurred brewers to find a way to sell cheaper beer. The solution was found in a loophole in the beer tax regulations, which defined beer as having a minimum of 67 percent malt in the fermentable ingredients. Beers brewed with less were classified as happo-shu (sparkling alcoholic beverages), and were taxed in two categories. Those containing 25-66 percent malt were taxed at 152.7 yen per liter, while those with 25 percent malt or less were taxed at 83.3 yen per liter. In place of malt, brewers can use lower-cost materials such as rice, cornstarch, saccharified starch and sugars.
Suntory was the first to release a beer-style happo-shu (hereafter referred to as low-malt beer) with their Hop's Nama in 1994. Brewed with 65 percent malt, it was comparable in flavor to many beers, while its price of 180 yen represented a sort of tax revolt among beer drinkers.