Liquor

Europe is the leading exporter of liquor and wine worldwide. The Japanese liquor market is one of the largest in the world with estimated annual sales of 3.5 trillion yen and growing consumption in several categories. Despite such figures, in terms of value, foreign liquor imports in 2020, at 256 billion yen (according to Japan Customs), accounted for a mere 9% of the total Japanese liquor market, including beer and beer-like products.

In Japan, the display of producer lot codes (traceability information) is not compulsory under the Food Sanitation Law, although it is recommended in the administrative guidelines of the Ministry of Health, Labour and Welfare (MHLW). By contrast, the EU makes it obligatory to display lot codes on food and beverage products as such codes fulfil an important role in any effective and efficient product recall or withdrawal process. Despite the fact that most importers of EU liquor products ensure that lot codes are in good order when the products are marketed and put into distribution in Japan, it is common practice for some opportunistic traders, prioritizing business profit over consumer safety, to import products with lot codes that have been erased, tampered with or covered up. The EBC encourages the Japanese Government to take more proactive measures to protect the safety of Japanese consumers since 2010. The EBC appreciates the notice issued by the National Tax Agency (NTA) in September 2014 and the new liquor sales management training textbook/DVD, which was produced by the NTA in April 2017 and includes these concerns. Furthermore, the EBC recognizes the notice issued by the Ministry of Economy, Trade and Industry (METI), MHLW, and the Ministry of Agriculture, Forestry and Fisheries (MAFF) in July 2017, stating their concern regarding the presence of liquor products with erased lot codes in the market. The EBC continues to urge the Japanese Government to take further proactive measures to ensure the display of product lot codes for traceability. Japan Wines and Spirits Importers’ Associations (JWSIA) submitted the request letter including legal expert’s opinion paper regarding the quality assurance role of production lot codes as an integral element of a brand’s trademark on 23rd June 2018 to NTA. The EBC supports JWSIA’s action that the NTA will establish notice under article 86 of the Liquor Trade Association Act and introduce the legal regulations to eradicate the distribution of imported liquor without production lot codes.

The definition of wine is much looser than that in Europe. The definition of “Japanese wine” was amended and made stricter in 2015, however the “wine” is still loose. Japan should implement a stricter definition of “wine” for production process. The definition of Japanese whisky was confirmed in February 2021.

The EBC welcomes the smooth implementation of the EU-Japan EPA. Significant additives to wine were approved by both Japan and the EU (25 items by Japan and 28 items by the EU) in the EPA negotiations, making it possible for Japan to import wines that use EU-approved additives. 23 out of 28 items were approved by MHLW and NTA and the final five items are still under the approval process as of September 2021. The MHLW and NTA should swiftly approve additives that are in common use among other industrialised countries.

The tariff on still wine and sparkling wine was completely removed entry into force of the EU-Japan EPA. The Japan-US Trade Agreement took into force on 1st January 2020 and tariff of still wine, 15% or 125 yen/litre whichever is lower, and sparkling wine, 182 yen/lire, will be gradually removed. The EBC urges Japan to completely remove all tariffs on all wines as anticipated.

Another aspect of the EPA that the EBC would like to put in a positive light is the agreed mutual protection of geographical indications (GIs) will ensure the protection of 139 liquor GIs from the EU.

A new liquor tax policy was formulated to reduce the tax on beer and to increase the taxes on happoshu and “new genre” beverages in three phases (in 2020, 2023, and 2026), ultimately making the tax rate for all these beverages a uniform 157 yen/litre. The tax on wine will be raised in two phases (in 2020 and 2023), ultimately making it equal to the reduced tax rate for sake. Although taxes on spirits will not be subject to the upcoming tax hikes, they are quite high at 370 yen/litre for products with less than 37% ABV (Alcohol By Volume) plus an additional 10 yen/litre for each additional percentage of ABV. The EBC objects to the increase in the tax on wine and urges Japan to reduce taxes on spirits.

Key issues and recommendations

Chairman

Mr. Bruno Yvon
President, MHD Moët Hennessy Diageo K.K.
Jinbocho Mitsui Bldg. 13F
1-105 Jinbocho
Chiyoda-ku, Tokyo 101-0051
Tel: +81-3-5217-9723
Fax: +81-3-5217-9751

Upcoming committee meeting schedule

Please contact the EBC ([email protected]) to confirm the meeting location prior to attending

2022
DATETIMELOCATION
March 24 (Thursday)08:30~Web
June 9 (Thursday)08:30~Web
September 9 (Friday)08:30~Web
December 2 (Friday)08:30~Web