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The Ehime Shinbun newspaper’s online edition reports on a new liquor tax system for inbound tourists, and efforts by the prefecture’s brewers to capitalise on increased interest in brewery tourism.

The article opens with a recap of some familiar facts: Japanese food and sake are both attracting attention overseas as elements of traditional Japanese food culture, and this “washoku boom” (和食ブーム, craze for Japanese food) has led to new record export values for sake for seven years in a row.

Numbers for inbound tourism have also jumped, with more overseas tourists arriving in Japan. A new liquor tax system for overseas visitors came into effect on 1 October 2017 in an attempt to connect and increase the international popularity of sake and Japan-bound tourism. As of 1 December 2017, three breweries in Ehime have obtained permission to operate the system. Will they be able to light a fire under brewery tourism and attract visitors to the area?

The new system waives liquor and consumption tax for sake purchased on-site at designated breweries, wineries and distilleries. The Japan Times reported on 1 October 2017 that 48 producers in 24 (of the 47) prefectures had been approved for tax-free sales.

“Sake exports are seeing double-digit growth every year, but it’s still less than 4% of total production. Right now, the core is still domestic sales. Thinking about the future, we have to expand exports,” comments Ochi Hiroshi, senior managing director of the Ishizuchi brewery and also the chair of the Ehime Prefecture Brewers Cooperative.

Department of the Treasury trade statistics show that the value of sake exports has risen over seven years, from JPY 7.184 billion in 2009 to JPY 15.581 billion in 2016, an increase of 1.2% over the previous year. A breakdown of export destinations by country and region shows that the biggest destination is the USA, taking 1/3 of the total, with Asian countries and territories such as Hong Kong, Korea, China, Taiwan, Singapore and Vietnam taking around 1/2 and showing an increase of 15% over last year.

Underlying this success is the global popularity of Japanese food. Washoku was made a UNESCO Intangible Cultural Heritage in December 2013. Yagi Nobuki, president of Yagi Shuzobu, has been promoting exports since 2008 and says that based on his visits abroad sake is also getting a warm welcome alongside Japanese food. Buoyed by this positive reception, Ehime opened an Ishizuchi Sake Bar in downtown Singapore in April 2017, where you can sample the wares of ten breweries from the prefecture. It’s hoped that it will provide an opening into new distribution channels overseas.

The number of foreign visitors coming to Japan has jumped since 2012, with Japan National Tourism Organisation (JNTO) statistics putting the 2011 total at 621,872 and the 2016 number at 24,039,700 – four times higher. 2017 saw another steep increase, with data up to November 2017 indicating around 26,000,000 – already more than the previous year. The numbers are expected to increase still further in the run up to the 2020 Tokyo Olympics and Paralympics.

Sake is one part of the “Cool Japan strategy” that attempts to sell Japanese culture to the world. The Japan Tourism Agency (JTA) hopes that the new liquor tax system will make it easier for overseas tourists to buy Japanese alcoholic drinks, and thereby promote brewery tourism and encourage visitors to go further out into the regions. Breweries, wineries and distilleries need to obtain permission under the new system to make tax-free for-export sales, which are then exempted from both the normal liquor tax and consumption tax, applying to purchases of JPY 5,000 or more. 

The three Ehime breweries participating in the new system as of 1 December 2017 are Ishizuchi, Yagi Shuzobu and Ume Bijin, with more expected to join.

That covers part 1 of the article, and I’ll look at part 2 tomorrow.