* Sapporo production probed, may owe $113 mln extra tax
* Sapporo to change process to avoid risk of tax rise
* Low-tax 'third beer' beverages enjoy rapid growth
* Japan's complex beer taxes draw industry complaints (Adds details of product, relaunch plans, complex regulatory regime)
By Ritsuko Shimizu and Taiga Uranaka
TOKYO, June 4 (Reuters) - Beermaker Sapporo Holdings Ltd said on Wednesday it will tweak the production process for its Goku Zero beer-like drink and relaunch it following a tax snag that may cost the group an extra 11.6 billion yen ($113 million) in liquor taxes.
Japan's fourth-largest brewer said tax authorities had requested data on the production methods for Goku Zero, which is classified as "third beer", a drink made from malt alternatives or a mix of low-malt beer and other alcohol, and taxed at barely one-third the rate of regular beers.
These low-priced alcoholic drinks known as "third-beer" products are a major growth market for Japan's breweries. But Sapporo will now recast Goku Zero as a "low-malt" beer, which will carry a tax rate two-thirds higher than "third beer."
Taxes on beer in Japan vary depending on the volume of malt they contain as a percentage of fermentable ingredients. The regime is highly complex with eight separate categories.
The beer industry has long urged changes to this tax system by the government, which, under Prime Minister Shinzo Abe, is focused on regulatory reform.
The tax authorities are still evaluating whether Sapporo's existing production process for Goku Zero meets the criteria for "third beer." Goku Zero, marketed as a purine- and sugar-free beverage, had surpassed the company's sales targets.
"If the investigation concludes that it does not qualify as 'third beer' it would be a burden on our customers, so we voluntarily decided to change it to low-malt beer," Sapporo Breweries Ltd President Masaki Oga told a news conference.
If Goku Zero cannot be classed as "third beer," the company would owe the additional 11.6 billion yen in tax, based on sales since its launch last June and remaining inventories.
Sapporo's sales volumes in this part of the market rose 43 percent in the January-March quarter from a year earlier, versus 5 percent growth for regular beer and a 4 percent drop for low-malt beer. Its "third beer" volumes matched regular beer sales in the quarter at 5.57 million cases each.
The company had sold 6.13 million cases of Goku Zero as of end-May after nearly one year on the market. ($1 = 102.4300 Japanese yen) (Additional reporting by Chris Gallagher; Editing by Edmund Klamann and Jane Merriman)
* Sapporo to change process to avoid risk of tax rise
* Low-tax 'third beer' beverages enjoy rapid growth
* Japan's complex beer taxes draw industry complaints (Adds details of product, relaunch plans, complex regulatory regime)
By Ritsuko Shimizu and Taiga Uranaka
TOKYO, June 4 (Reuters) - Beermaker Sapporo Holdings Ltd said on Wednesday it will tweak the production process for its Goku Zero beer-like drink and relaunch it following a tax snag that may cost the group an extra 11.6 billion yen ($113 million) in liquor taxes.
Japan's fourth-largest brewer said tax authorities had requested data on the production methods for Goku Zero, which is classified as "third beer", a drink made from malt alternatives or a mix of low-malt beer and other alcohol, and taxed at barely one-third the rate of regular beers.
These low-priced alcoholic drinks known as "third-beer" products are a major growth market for Japan's breweries. But Sapporo will now recast Goku Zero as a "low-malt" beer, which will carry a tax rate two-thirds higher than "third beer."
Taxes on beer in Japan vary depending on the volume of malt they contain as a percentage of fermentable ingredients. The regime is highly complex with eight separate categories.
The beer industry has long urged changes to this tax system by the government, which, under Prime Minister Shinzo Abe, is focused on regulatory reform.
The tax authorities are still evaluating whether Sapporo's existing production process for Goku Zero meets the criteria for "third beer." Goku Zero, marketed as a purine- and sugar-free beverage, had surpassed the company's sales targets.
"If the investigation concludes that it does not qualify as 'third beer' it would be a burden on our customers, so we voluntarily decided to change it to low-malt beer," Sapporo Breweries Ltd President Masaki Oga told a news conference.
If Goku Zero cannot be classed as "third beer," the company would owe the additional 11.6 billion yen in tax, based on sales since its launch last June and remaining inventories.
Sapporo's sales volumes in this part of the market rose 43 percent in the January-March quarter from a year earlier, versus 5 percent growth for regular beer and a 4 percent drop for low-malt beer. Its "third beer" volumes matched regular beer sales in the quarter at 5.57 million cases each.
The company had sold 6.13 million cases of Goku Zero as of end-May after nearly one year on the market. ($1 = 102.4300 Japanese yen) (Additional reporting by Chris Gallagher; Editing by Edmund Klamann and Jane Merriman)
No comments:
Post a Comment