Several weeks ago when a friend came to visit, we decided to go to the convenience store to pick up a few beers. Being a bit of a beer fan, she was familiar with names like Asahi, and Sapporo and was anxious to try new things, but she was not ready for the giant wall of beers that faced her when she opened that refrigerated door. We’ve probably all been there. Faced with so many different types of beer that run the gamut in terms of price and flavor, it can often be difficult to choose. Between the 4 major beer companies (Asahi, Kirin, Suntory and Sapporo) there are nearly 30 different products available at any given time, not including all the seasonal varieties. While some might say the difference between those beers is a matter of taste, the truth is, it’s a matter of tax.

According to the Alcohol Taxation Act, beer and beer-like beverages fall into three different categories based on the amount of malted barley used: beverages containing 50% or more barley malt, those between 25% – 50% barley malt, and anything using 25% or less barley malt. There is a substantial difference in the way each of these brackets is taxed, with the lowest being 86 yen cheaper per liter. Naturally, your best bet is to buy craft beer, but that still only accounts for 1% of the market, so to help you make a more informed decision next time you buy beer in Japan, here is a simple breakdown of the three types of beer.

The Big Four: Asahi, Kirin, Sapporo, Suntory
Technically speaking, any beverage in which the grain content is less than 67% malted barley cannot be called beer in Japan. Even so, nearly all the major brewers in Japan get as much as ⅓ of their grain from rice. This is not particularly rare in other countries either – most of the large American brewers such as Budweiser, and Coors use rice in their beer as well. Seriously, go check the can. Grains such as corn or rice are called “adjuncts” by brewers. The purpose of using rice is not to save money, but a stylistic choice; rice adds a crisper mouth feel without changing the overall flavor. The Japanese beer market puts a lot of focus on the mouth feel, or nodogoshi (のどごし) as they all it. It is the reason Japanese beer is served ice-cold, and why Japanese people say beer tastes so good on a hot day.

The use of the term beer however comes with a hefty tax burden. To skirt that law, Suntory introduced “Hop’s Draft” in 1994 containing slightly less than the required barley ratio, and thus enjoying a much cheaper tax rate, giving birth to the second category of beer.

Happoshu: Low-malt beers
For decades anything less than 67% was considered to be happoshu – literally, “bubbling spirits.” Because of the enormous popularity of these bubbling spirits, the government raised the tax on them to the same as ordinary beer. The industry responded by lowering their barley content even further. Most happoshu these days contains less than 25% barley in its fermentable ingredients. Instead they use a wide variety of fermentables such as rice, corn, sorghum, potatoes, and starch. This type of beverage is only taxed 134 yen per liter, compared to 220 yen per liter of ordinary beer. These beers are much more likely to give you a headache than beers with higher malt content.

Daisan Beer: the third beer
By far the cheapest type of “beer” on the market in Japan are beer-flavored beverages collectively labeled daisan beer (第三ビール), or “the third beer.” Because these beers contain no malt whatsoever, they can’t really be called beer in any sense. This term actually encompasses several types of beverages. Some substitute malt for alternatives such as soy-protein, or pea-protein. Other beverages are a combination of cheap spirits and happoshu, technically classified as a liqueur. These ones are almost certain to give you headache, if not make you feel sick if you drink too many. Ironically, these are often marketed as the healthier alternative to beer as they have less carbohydrates or purines.

So how can you tell which is which? Follow the money. If you see a 30-40 yen price gap, you have just found the happoshu rack. If you see some beers that are even cheaper by as much as 10-25 yen (for 350ml cans) you have probably found the daisan beer. The word barley, or in Japanese mugi is a bit of a badge of honor, so beers that have it will most likely display it proudly. Look on the back – if you don’t see the word mugi (麦) in the ingredients, it is daisan beer. The next time you are choosing a beer for the train ride home, just remember: happoshu is not legally beer, but at least contains all the ingredients beer does (and a few more) and daisan beer is not beer in any sense of the word. It is essentially a beer flavored soft drink with spirits mixed in.

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