Japan: Suntory Beer braces for tax hikes starting next year

Suntory Beer Ltd. will strengthen the brand power of its products, such as the flagship “Kinmugi” third-segment beverage series, to get through an October consumption tax hike and liquor tax revisions starting next year, President Kenji Yamada was quoted as saying by The Japan News on July 11.

Sales of third-segment beer products, which are more affordable than normal beer, are growing as consumers are becoming increasingly budget-minded.

But prices of third-segment products are expected to rise as the tax rate for such products will be increased in stages by 2026 and unified with that for beer. In addition, the consumption tax is slated to be raised from 8 percent to 10 percent in October.

“The market is expected to be more vulnerable [to the consumption tax hike] as it is more stagnant than when the tax was raised [from 5 percent to 8 percent] five years ago,” Yamada said in a recent interview.

To reduce the impact from the tax hike, “we want to draw customer attention through sale activities in cooperation with food makers and by offering limited-time products,” Yamada said.

“More and more people are wanting a variety of tastes from third-segment beer products,” he said.

The company will strengthen efforts to “heighten the brand power” by offering new products that meet various customer preferences, including those based on differences in age categories and lifestyles, Yamada said.

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