Small price, big difference – how one sake brewery is handling the tax cut

Yahoo News Japan carries an article from KHB Higashi Nihon Hōsō about the revised tobacco and alcohol taxes that came into effect on 1 October 2020 [coincidentally Sake Day] and how one sake brewery reacted in a slightly unexpected way.

Wine and the so-called “third beers” [which include less hops as a tax loophole] became more expensive, but sake actually benefited from a small tax cut.

One Miyagi Prefecture sake brewery saw this as a chance to increase their customer base, and reduced the retail price of one product on the same day.

Niizawa Jōzōten brews in the towns of Kawasaki and Ōsaki, their best-known product is Hakurakusei [伯楽星] but they make a dozen other lines including the Atago no Matsu Senretsu Karakuchi that won a platinum medal in the honjōzō category of the Belgian Sake Selection competition two years ago.

They saw the decrease of around JPY 18 on 1.8 litres of sake from 1 October 2020 as a business opportunity, and reduced the before-tax retail price of Atago no Matsu Senretsu Karakuchi by JPY 96. So it cost JPY 1,865 in September, down to JPY 1,759 in October. [It seems to only be available as a 1.8 L bottle.]

Why bring down the price of this product only, and by this much? Iwao Niizawa, president of Niizawa Jōzōten, explains that if they gave a small discount on the price of one of their more expensive sake it wouldn’t feel like much – so they decided to drop the price of their most reasonable sake by about JPY 100.

The brewery hopes that the tax cut and ensuing price reduction will prompt more consumers to drink sake against the background of declining consumption. Iwao Niizawa hopes that making smart sales choices at this time will more than make up for the price cut.

Links

• Original article (Japanese, Yahoo Japan News, 1 October 2020)
• Niizawa Jōzōten (English/Japanese)
• Sake Selection (English)