At a Tokyo news conference on June 4, Sapporo Beer President Masaki Oga announced his company would halt sales of its Goku Zero alcoholic beverage after current inventory was shipped. The parent company, Sapporo Holdings, had been contacted by the National Tax Agency in January regarding the manufacturing process for Goku Zero, which is classified for tax purposes as something commonly referred to as daisan (No. 3) beer, meaning a fermented drink made with something other than malted barley and fortified with grain spirits. This recipe gets around the tax for happoshu, another beerlike beverage that itself was created in the 1990s to get around the beer tax.
The government thinks that Goku Zero is happoshu, whose tax levy is higher than daisan's, and so Sapporo owes the agency money. Oga said the company would stop making the product and then reintroduce it later this summer as happoshu, maintaining that Goku Zero really is daisan beer but Sapporo cannot publicly reveal its manufacturing process because that's a secret. This is considered a blow for the company, which until the end of April had sold the equivalent of 200 million 350-ml cans of Goku Zero, making it one of the most popular daisan beers on the market. Retroactively, it means an added tax bill of at least ¥11.6 billion. Sapporo Beer's projected profit for the year is ¥5 billion, so they can definitely kiss that goodbye. When the company resumes sales of Goku Zero the price of a can will be ¥20 more than it is now, and since the tax on happoshu for that size can is about ¥48 and for daisan a bit more than ¥20, margins will be reduced.
Sapporo Holdings' stock price dropped by 6.6 percent the next day, so it's definitely an important news story for shareholders, but for everyone else it probably isn't, especially given the incoherence of the alcohol tax, which has nothing to do with alcohol content, usually the yardstick in other countries. The price of a 350-ml can of beer typically includes ¥77 in taxes, while the same amount of whiskey will have ¥129 in tax, nihonshu (sake) ¥42, shōchū (distilled spirits) ¥70 and wine ¥28. The alcohol tax is a throwback to a time when certain types of liquor were considered luxuries. Beer wasn't always associated with the hoi polloi.