Business / Corporate

Court dismisses Sapporo Breweries' tax refund request over beer-like drink Goku Zero

Kyodo

A court dismissed Wednesday a lawsuit filed by Sapporo Breweries Ltd. demanding a liquor tax refund of ¥11.5 billion ($105 million) paid on sales of a beer-like alcoholic beverage.

Sapporo Breweries began selling Goku Zero in June 2013 as a “third-category” beer-like beverage, which have a lower liquor tax rate than regular beer and happoshu (low-malt beer). It suspended shipments the following year because tax authorities said the beverage might fall under another category.

Sapporo Breweries changed its production process and resumed sales of Goku Zero as a happoshu beer in July 2014. The company later sought the return of the ¥11.5 billion paid in additional liquor tax after determining the original product was in fact a third-category beer.

The Tokyo District Court decided that Goku Zero cannot be classified as a third-category beer.

Brewers in Japan have been vying to develop third-category beers, as the reduced tax rate enables them to offer lower prices to consumers. Third-category beers include beverages that use alternatives to malt, such as soy or pea protein.

The tax rates for beer and beer-like drinks are set to be unified in stages by 2026, with beer to be taxed less and happoshu and third-category beers to be taxed more.