Rising prices for regional sake

by | Jan 3, 2019 | Sake News from Japan

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The Nikkei news site has an article on rising prices for regional sake, also known as jizake (地酒).

The article points out that many breweries are in rural areas, far from the larger cities where their sake is drunk, burdening them with rising transport costs. They also face increased electricity prices among other charges. Better-known breweries such as Ishimoto, makers of Koshi no Kanbai, are leading the way in putting up prices.

Sake breweries aren’t the only ones raising prices – it’s currently happening on a broader level across the food and drink industry. The Tatsuizumi brewery followed the trend in September 2018. They ship 90% of their tokubetsu meisho sake outside of their home region of Aizu in Fukushima Prefecture, and have increased its price by 5-8%. Although there was no immediate effect on sales after the price hike, brewery representative Sōichi Shinjō points out that their costs are increasing across the board – heating, lighting, transport and more.

Another brewery putting up its prices is Kitaya in Fukuoka Prefecture, who won the sake division at the International Wine Challenge in 2013. They increased the price of almost their entire range in October, by an average 5%, mostly to cover transport costs. Miyakobijin in Hyogo Prefecture put the prices of all their products up in October, for the first time in five years.

The Ishimoto brewery changed the recommended retail price for a 1.8 L bottle of their Tokusen ginjō in March, from JPY 3,350 to JPY 4,000. They softened the blow of the price increase by offering a free gift box when the new price came into effect. The label was redesigned to give a more high-class impression, part of rebranding the line so it looked the part for the new price. The new higher price has been in effect for six months, with many retailers reporting that it has had no effect on sales.

The biggest driver behind brewery price increases is rising transport costs. Longer distances, from rural breweries to urban drinkers, make it hard for individual companies to absorb increases. There has also been a substantial rise in prices of cardboard and labels.

The Echigo Denemon brewery in Niigata Prefecture raised its prices in September for the first time since the brewery was founded in 1996. They managed to keep their prices low while brewing with brand-name rice, but sudden increases in distribution and raw material costs left them with no choice but to revise their minimum prices.

Fukumitsuya in Kanazawa, makers of Kaga Tobi, increased their prices in July. More than 80% of their products became 9-13% more expensive, in their first price increase since 2014. Electricity price increases from the Hokuriku Electric Power Company in the spring were the final straw – their power bills have tripled over the last three years, forcing them to charge more.

A survey by the National Tax Agency found that sake shipped out of the regions in the 2016 brewing year (July 2016 to June 2017) totalled 544,000 kilolitres, a drop of 14% in 5 years. However, the volume of tokutei meisho sake shipped was up 10% in the same period to 184,000 kilolitres. These “premium” classifications are mostly carefully brewed for high quality and flavour, and are responsible for some of sake‘s recent popularity – and also not as vulnerable to price increases, so a safer choice for breweries who need to adapt and survive.

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