Monday is the first day of a higher liquor tax on “third-category” beer products, and retailers are divided over whether to hike prices of the sparkling drinks.

The beverages have enjoying strong sales due to their lower prices compared with the two other types of beer products.

Under the revised Liquor Tax Law, the tax on third-category brew increased by 3.8 yen to 28 yen per 350-ml can. In contrast, the tax on regular beer was lowered by 0.7 yen to 77 yen. The tax on “happoshu” low-malt beer was left unchanged at 46.99 yen.

While major brewers have set new prices reflecting the revisions, major retailer Aeon Co. and supermarket chain Izumiya Co. said they will not raise the prices of third-category beer.

Other supermarket chains, including Daiei Inc., and leading convenience store operators such as Seven-Eleven Japan Co., Lawson Inc. and FamilyMart Co. said they would pass the tax increase on to consumers.

Beverages classified as third-category beer are made from non-malt ingredients such as soy protein and thus had been subject to lower liquor taxes than regular beer and happoshu.

The government decided on the liquor tax revision to simplify complex taxation rate categories that vary depending on raw materials and manufacturing methods. The revision reduced the number of liquor categories to four from 10, and narrowed the differentials in tax rates among them.

Some analysts point out that the government also signaled its intolerance for future products that take advantage of legal loopholes for lower prices — as third-category beer has been.

Industry officials anticipate the revision may be a temporary step and more drastic changes may be forthcoming to further narrow the tax differentials.

The revision also lowered taxes on refined sake by 14.8 yen but raised those on wine by 6.9 yen per 720 ml.

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