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MEXT: research paper Societal Influence and History: The Beer Industry of Japan
はじめに（見出しは太字） What is thought of when a when the word Japan is said? For many, having never been to or studied the nation in depth, the ideas and things related to its culture may come to mind. The country has many things unique to offer the world. This is, of course, includes nihonshu. But, in actuality, nihonshu is fairly unpopular in Japan today. One could say internationally the drink gains more attention than it does in the country of its inception. In fact, some Japanese sake brewers have recently turned to craft beer, as seen with the Kiuchi family. 1 Why did nihonshu become such a weak market, while beer steadily grew? Of course, there was a period of history where the opposite was true. However, today, beer can be seen all over cities like Tokyo in Japan. Today, it is clear that beer dominates the market. Furthermore, the beer available tends to only come from four major (some could say three) Japanese companies; and has so for a long time. These companies are: Kirin, Asahi, Sapporo, and Suntory. With the revival of local beer being able to be produced since 1994, of course other Japanese beer options have come into existence, but they barely touch on the market share that these companies hold. The main types of beer produced by the big four tend to be all the same: the adjunct lager. A light, almost flavorless, mass produced beer. Furthermore, in recent decades, an even lighter product has come out that tastes and looks like beer, but technically is not beer. This is called happoshu or third beer. It is uniquely created by Japan to serve the needs of the companies and consumers it is sold to. It tends to be weaker and cheaper in flavor and price. One can strongly assume that these are the reasons why it was created. Furthermore, this trend also tells us about the majority and their way of thought in regards to beer. Why and how did a foreign drink become so popular in a land that cannot support the ingredients to grow and produce a product at the scale seen today? Did the government have something to do with its upbringing in society? Did big business advertise and sell it to people? Or did people find it to their liking, and support the product from the ground up? In short, how did beer come to be such a large influence in Japanese society? Since the Meiji era, the country has been largely dominated by a central government. Its soft authoritarian policies that were highly accelerated during the pre and inter-World War 2 eras and market control cannot be ignored when first looking at this question. Furthermore, the government rapidly took 1 http://www.npr.org/blogs/thesalt/2012/09/18/161147806/japanese-sake-makers-shake-off-tradition-trybrewing-craft-beer
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in Western ideas at this time, and Japan began to shift drastically in many aspects. Given this information, and the hierarchical, group focused nature of society, the top down theory tends to carry a strong implication. After analyzing the situation in depth, this turns out to be the case. Beer was supported both by the government and keiretsu in addition to cartels within the industry itself. This began almost as soon as beer started to kick off in Japan, but really took off after the Taisho era. Big business and the government mended conditions so that a product like beer, which was beneficial for national financial growth, could flourish. However, only the beer companies big enough to produce the big outcomes required for immediate growth could benefit; this meant cutting out everything not of profit in order to foster these companies’ products. Was the choice leading to up to the support carried out by the will of the people, though? While people played a part in the popularization of beer, they were not the driving force of the product. The ultimate drivers were the beer industry cartels created by big business, and the support they received from the government and keiretsu who supported them. Because the government gained much control over the beer industry during the pre-war era via its policies, the beer industry became strictly run by monopolies supported by the government. These power structures became rooted in the system, and despite the occupation’s reforms, they lingered on. Beer production rose and over took sake due to the nature of its ingredients in the time during the war. During the war, beer changed in image and became a consumer focused product for the masses, no longer a German modeled product aimed to impress other nations. With protection from the Ministry of Finance, the competition was cut, the product was simplified and protected in order to be capitalized on and rebuild Japan. Though, it is evident that this process was in the making long before the occupation. History Beginnings in the Meiji Era Beer had its true beginning in Japan beginning with the end of the Tokugawa Shogunate. 2 Despite being brought in by some Dutch scholars via Deshima during the Shogunate, the product never really expanded into the market. At the end of the Shogunate the country became open for trade, and therefore able to import all sorts of Western products that became interesting. Of these, of course, was beer. Initially, an expensive and odd tasting product to the general public, it grew out of cities like Yokohama
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and Tokyo. 3 This was due to the poor state of roads in Japan until the 1960’s. It was very hard to transport the product to distant areas, especially given Japan’s terrain. In addition, the rail system was poorly developed. For these reasons, beer was not sold initially farther than areas of its creation. 4 Furthermore, foreigners were primarily coming into this region and starting their own businesses. Origins of Kirin Kirin found its beginnings in Yokohama, as did many other small breweries in the area at the time. The initial reason for its creation was to undercut the market against foreign import brands, which were plentiful at the time in the area.5 In the area was a famous foreigner by the name of William Copeland. Copeland decided to create a brewery, as foreign entrepreneurs were also not subject to the national Alcohol Tax, due to the Unequal Treaties.6 The name of the first brewery was Spring Valley. However, it would eventually go bankrupt in 1882 and be bought out. His site and assets were purchased by the Japan Brewery Company, a group consisting of European and Japanese investors. The original chair of the Japan Brewery was a man named James Dodds, who was offered to be bought out by an important Mitsui official named Magoshi Kyouhei. This was to be unsuccessful, however. Magoshi would eventually in 1892 as the Yokohama branch manager of Nippon Beer’s Yebisu brand.7 Copeland continued relations with the Japan Brewery, but in 1889 he gave up on brewing, and moved to South America in 1894. He made a return to Yokohama in 1902, but passed away shortly after the visit. The Japan Brewery paid homage to him and covered all the funeral expenses, accrediting him with fostering their firm’s creation.8 The Japan Brewery was able to acquire Copeland’s firm only due to a way around the treaties currently in place. This was because foreigners and Japanese citizens were forbidden to conduct business with one another in Japan. Therefore, a man by the name Thomas Blake Glover, who was a special adviser to Mitsubishi, and a man named Mr. M. Kirkwood, who worked for the Ministry of Justice in Japan, advised the investors to register their brewery as an English firm in Hong 3 Brewed in Japan p.6 4 Brewed in Japan p.12 5 Brewed in Japan p.12 6 Brewed in Japan p.13 7 P.28 8 P.15
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Kong. This therefore allowed foreign residents the ability to live and work with Japanese, if they had a passport. Also, they could sell their assets to Japanese and dispatch sales nationwide. 9 Thus, The Japan Brewery was heavily influenced by foreigners initially, and it began to import techniques from Western nations, primarily from Germany. More importantly, it was initially already being tied to the government and zaibatsu. Japan Brewery’s first brew master was a German by the name Herman Heckert, from Hamburg. He was to take up the post by July 5, 1887. Kirin’s CEO makes note that the brewmasters at this time were strictly interested in providing Japanese with the most authentic quality and satisfying German taste as possible.10 This was because the product had to compete with foreign imports. However, the company was able to make gains due to Glover, the Mitsubishi advisor, who would advise the company to take advantage of the Unequal Treaties. He also set the Japan Brewery up with a Japanese retailer, Meidi-ya, as the prime distributor of the “Kirin” brand beer domestically. 11 The early association with beer and the zaibatsu is clear. Mitsubishi was interested in founding distribution firms for foodstuffs in Yokohama, and had heavy connections to Meidi-ya since it was its founder. Mitsubishi even sponsored Meidi-ya members to study business in London for six years.12 Kirin was to become a reputable brand by 1891. It aimed to be very foreign in nature, and began imitating its unicorn off of the design from Guinness Stout’s. 13 Kirin would remain heavily foreign until the introduction of Shibusawa Eiichi, the founder of the Tokyo Stock Exchange, as a main lineup in the company in 1889. Kirin’s ties would deepen with Meidi-ya, and it would eventually become its sole contract agency (tokyuyakuten keiyaku). Meanwhile, Magoshi Kyouhei, the long time Mitsui employee, would turn his focus towards beer and become the President of Nippon Beer by 1900.14 Nippon Beer being the company that would form Dai-Nippon (Sapporo, Yebisu, Asahi). He was interested in merging Nippon with Kirin, but Dodds was uninterested. At this time the current director of Meidiya, Koumei Genjirou was also interested in the influence of foreigner directors on the Japan Brewery. He would discuss this issue in detail with the president of Mitsubishi zaibatsu, Iwasaki Hisaya. 9 P.18 10 P.22 11 P.25 12 P.25 13 P.26 14 P.28
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Eventually, and carried out in the top floor of Mitsubishi Joint Stock Company in Tokyo, a decision by the shareholders for Meidi-ya to buy and reincorporate the Japan Brewery as the Kirin Brewery Company, Ltd. was decided.15 Furthermore, Koumei would be the president of Meidi-ya. 16 Thus, from the beginning stages of Kirin, we see a tie with Mitsubishi beginning to form. Without Mitsubishi’s sponsorship it is unclear whether Kirin could have been taken from foreign control. The firm would support Kirin for many years to come.17 Origins of Dai-Nippon Dai-Nippon was a beer conglomerate that was the merger of Osaka, Nippon, and Sapporo Beer companies. The conglomerate would dominate nearly 75% of the beer market until the United States broke up monopolies after World War Two. Afterwards, one of the products would once again return to its original name. Dai Nippon found its beginnings as Sapporo beer, and more importantly, it began as a part of a government colonization program by the Home Ministry in 1873. 18 Ookubo Toshimichi, the head of the Home Office, issued a memorial that encouraged industry (kangyou kenpakusho), which was a critical strength he believed for the country. His famous saying, fukkoku kyouhei, was expressed as part of this. In order to achieve a strong nation, security was essential, and he saw industrial development in the wild area of Hokkaido as a way to achieve this. 19 One of the spearheads assisting Ookubo’s way of thought was a man named Kuroda Kiyotaka. Kuroda would eventually become the minister of agriculture and Japan’s second prime minister. Kuroda took the advice of a foreigner named Horace Capron that the government should begin cultivating American strains of barley, wheat, rye, and hops on Hokkaido’s rich lands. Kuroda took this suggestion and began to develop agriculture plans in Hokkaido and capitalize it by establishing a beer brewery in Tokyo. 20 Hokkaido was a very important location due to the ice it contained, and the need for it in the storage and transportation of beer. Kuroda set the brewery to be made in 1876, approving the situation of Hokkaido’s plan. 21 The brewery had a rough start, however, despite the planning involved. It was unable 15 P.29 16 P.27 17 P.52 18 P.31 19 P.32 20 P.32 21 P.35
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to harvest adequate hops and obtain enough bottles to begin making the beer. They had to import these from foreign sources.22 Once the beer was produced, it would serve Japan’s most elite consumers, such as government ministries and agencies. In addition it would also serve the leadership of the Japanese Imperial Army.23 In particular, Sapporo Beer was taken by Kuroda to the Army while fighting Saigo Takamori during the Satsuma Rebellion.24With the creation of the brewery by the government, to serve government officials, it can be evident that people had very little say in the establishment of what would be several of the leading companies today. The development was evidently top down from the start. Eventually, the Hokkaido Colonization Office would be abolished and replaced by the Hokkaido Government. The Office in Sapporo was sold to the Ookura Trading Company, which also held shares in the Japan Brewery/Kirin. Entrepreneur Shibusawa Eiichi, also tied to Kirin, bought the beer plant from Ookura and reformed it to be Sapporo Breweries Company, Limited. It would pursue the Western image, and hire a German brewmaster, as Kirin did. 25 Sapporo would not continue for much longer on its own, however. As mentioned before, President Magoshi Kyohei of Nippon Beer, had ties to Mitsui as the head of its Yokohama branch. Under the aim to get rid of petty competition (Kagyu kakujou no kyousou) between beer firms, the expansion of the overseas market, and to encourage the government’s desire for self-sufficiency (jikyuujisoku) in resources and manufacturing, Mitsui would enter a deal to help shape a new joint venture. The minister of Agriculture and Commerce, Kiyoura Keigo, Magoshi , and Mitsui officials met to mediate the negotiation of the creation of a corporate conglomerate. 26 Under Magoshi’s leadership, Sapporo Breweries, Osaka Beer (Asahi), and Nippon Beer (Yebisu) would merge to form Dai Nippon on March 26, 1906.27 With this Mitsui gained control over the brewer’s export sales; while Mitsubishi, who founded Meidi-ya, maintained control over Kirin’s. According to Sapporo, the purpose of the Merger was to achieve greater stability across the market in Japan. However, Kirin contends this, claiming that the merger was self-interested. Dai Nippon sought to create the largest, most productive, and geographically dominant firm in order to dominate the
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market.28 By 1907, Dai Nippon maintained 72% of the Japanese domestic beer market, with Kirin at 20%, and the remaining competition at 8%. Regardless of whose opinion was correct, it is clear that the path for beer to become a big Japanese product was set. However, it would not gain a Japanese image to it for some time. Despite the growth of both Kirin and Dai Nippon, beer would remain a Western product, using European ingredients, methods, and brewmasters well into the Taisho and Inter-war periods. Furthermore, it would sell itself in newspapers and export itself as so. 29 It is important to note that during this era, and coming sections of this paper, many entrepreneurs were hurt by the government’s goals for big business. Only the strongest would be allowed to continue. 30 Taisho Era This period saw great growth for Japanese beer companies, or rather, those who were allowed to survive. World War 1 began, and due to this, many European firms pulled out of the area. This included the beer industry. Japanese firms moved to take advantage of this situation rather quickly, and overall Japan’s industrial growth propelled. Though, despite Japan entering conflict with Germany and European firms pulling out, Japan’s beer Industry still maintained true to German processes and some brewmasters remained due to reasons outlined in the following paragraph. 31 However, for a brief period of time, Kirin’s brewmaster was ordered home to aid in the war effort. This time gave Kirin some ability to play with Japanese equipment, and alternative cheaper substitutes to the German method; 32 thus, possibly beginning the slow shifts towards a lighter, more Japanese known product. Kirin would regain its relationship with the German brewing world after the war and maintain traditional brewing practices for the most part. 33 By World War 1 the leading breweries in Japan numbered four in total: Kirin, Dai Nippon, Kabuto, and Teikoku Beer.34 Though, the share was truly only set between two as mentioned above, and the latter would not last for much longer. Despite the growth of the companies, Japan still continued to 28 P.59 29 P.48 30 P.54 31 P.55 32 P.67 33 P.79 34 P.67
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heavily rely on western ingredients for production, such as hops. The US Bureau of Foreign and Domestic Commerce, in addition to a magazine known as the Western Brewer made note in 1915 that the quantity and quality of Japanese produced hops were inferior, and that German produced the best. . 35 Overall, though, Japanese brewers were rapidly expanding and branching with technology. Kirin expanded south into Hyogo prefecture.36 It also went to acquire Orient Brewing, and took over their plant, thus giving access to Tohoku, where the plant was located. 37 These moves, one can assume, were also important because they strategically focused on challenging Dai Nippon’s Osaka and Sapporo regional dominance. In the 1920’s, the creation of the famous Yebisu Beer garden came into existence by Dai Nippon. Launched in Ginza, the garden aimed to tell Westerners that it as the “Only 1 st Class Bar and Resturant in the City.” Beer had grown large in Japan, but not yet large enough to overturn the nihonshu market. Furthermore, it had grown large in classes of people, overall. It is noted in an analysis made by the Nomura Banking Corporation, that the consumption ratio was 7/1 (beer/sake), and that beer was increasingly becoming more popular amongst poorer classes. 38 Though, the subject of nihonshu shall be addressed more personally later. What is largest about this era is the amount of narrowing down the industry took in terms of beer companies. Really it was only Kirin and Dai Nippon by this time, and the industry would continue to get smaller. There are some very important reasons as to why this happened, which were largely due to government tax, in addition to their involvement during the inter-war eras and big business’s continued support. Also, this era also began what would be the beer cartel between Dai-Nippon and Kirin breweries. In order to maintain control of both production and prices, the two would establish control over the domestic market.39 Big Japan Cartels Supported by Big Business Throughout the 1930’s, the creation of a powerful beer cartel was set in place in order to take 35 P.70 36 P.76 37 P.81 38 P.78 39 P.57
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over the retailers who decided to constantly undersell one another and to beat out rival producers. By 1936, the two victorious firms coming out on top would be Dai Nippon and Kirin alone. 40 It has already been noted that Mitsui backed Dai Nippon, while Kirin had Mitsubishi backing it. What will be addressed later is the government, which this section will build into. The cartel between Dai Nippon and Kirin noticeably began to form in 1928. The aim was to fix their respective market share and annual production in order to end the beer sales war. 41 However, the signs of it forming came from before. Already in 1923 the leading brewers had staged a friendly beer conference (biru konwakai), and by 1928 they would enter into a three company agreement (sansha kyoutei) on nationwide production sales. The three companies that joined this were Dai Nippon, Kirin, and Japan Beer Springs. Sakura beer, formerly Teikoku, also joined as Kyushu’s only brewer. 42 In order to break control that retailers had on prices, the four companies agreed to sponsor the formation of the Tokyo Alcoholic Beverage Wholesalers League. 43 Despite organizing however, they had no real control over the shop-level retailers, and underselling continued. 44 In 1932 the League met with the Tokyo Alcoholic Beverage Sales Association with an aim to not deliver any products to underselling retailers. However, both sides needed to keep beer moving, so the threat was turned down once again. 45 The companies would need something more to support their desire to set terms in their favor. Around this time, Magoshi of Dai Nippon fell ill. Before passing away, he gave his solemn promise (katai yakusoku) that his firm would compete with Kirin on equal terms. This would be carried out. Before doing so, a desired merger with a smaller brewery, Japan Springs was planned. After he passed away, Kato Takeo, the President of Mitsubishi Bank, would mediate merger talks privately. 46 Takeo, with the Minister of Commerce and Industry, Nakajima Kumakichi, brokered the agreement on June 21, 1933. The government gave its approval of the merger, conducted on July 19 th. 47 Both the government and Mitsubishi’s involvement with beer becomes blatant by this point. With this, only three primary beer firms would remain. Sakura would soon be a similar target. 40 P.56 41 P.98 42 P.98 43 P.98 44 P.99 45 P.100 46 P.100 47 P.101
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Dai Nippon’s agreement to create a formal beer cartel with Kirin was really triggered after Dai Nippon took over Japan Springs. Cartels already existed throughout Japan’s steel, weaving, banking, and machinery sectors.48 It is no surprise that they would find their way into the growing big business of beer. Dai Nippon suggested to Kirin that they enter a comprehensive cooperative beer sales agreement (bakushu kyoudou hanbai keiyaku). This would be supported by a new sales agency, the Cooperative beer company. The next aim of the cartel was to take over the remaining breweries: Sakura and Kotobuki-ya.49 The market share agreement read as follows: 1. Each company will invest 2 million yen in the established Cooperative Beer Sales Company, Inc. 2. Both companies will sell all of the beer that they produce through the new company 3. All advertising will be done via the sales company, and all expenses related to shipping will be paid by the companies 4. Production will be based on each company’s sales numbers: Dai Nippon’s share at 70.12% and Kirin at 29.08% 5. If excess volumes are produced, compensation will be paid to the other party 6. The practical business of sales, such as the sales network, orders, special contract stores, etc will be handled by each company 7. During the term of agreement, building new factories or improving existing ones without consulting the other party is not permitted 8. The same is true for factories overseas 9. This agreement will remain in effect for a period of five years 50 The cartel had been set, and soon after Kotobuki-ya would reorganize into the Tokyo Beer Company. It would not last long, as Dai Nippon simply bought out all of its shares, which were transferred over to the Cooperative Beer Sales company. The Company kept the ratio at 70:30 (DN/Kirin), as agreed upon. 51 With the creation of this cartel gave the rise to special contract sales network (tokuyaku hanbaimou), of greater proportion than any other food or beverage producer. Special chain stores (tokuyakuten) went from 212 stores in 1933 to 499 in 1938. The cafes and bars that became sponsored by the brewers also
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grew in the 1930’s.52 Beer was beginning to attract a regular large sales base that would continue to grow. Finally, in 1935, Sakura Beer would enter an agreement between Dai Nippon, almost exactly the same as outlined above with Kirin. With this, Sakura beer would be sold through a new sales firm, and it was granted annual sales of one million boxes of beer. If this could not be met, the Cooperative Beer Sales Company, owned by Kirin and Dai Nippon, would pay Sakura compensation. 53 The fixing of market shares is what drove the competitors out of business, it cannot really be refuted. 54 By this time, only Kirin and Dai Nippon stood at the top. After the government gained control over industry, Sakura would be abolished when they forced a merger with it into Dai Nippon in 1942. 55 The powerhouse that Kirin and Dai Nippon created would usher a new era of beer for Japan. Mitsubishi zaibatsu became heavily associated with Kirin, and Mitsui with Dai Nippon. 56 Zaibatsu played a large part of the industry’s support in sales, but were they alone? Pre-war Government and Laws Beginning with the Meiji era, the government already had sights on the food industry as part of its plans. Western eating and drinking habits were encouraged as determined by the government in order to convince the Great Powers to accept the Japanese as peers and renegotiate the Unequal Treaties.57 Furthermore, as noted earlier, it was part of the Government’s agenda to build industry; hence the creation of Sapporo to begin with. One reason behind the creation was security. 58 What granted this security though was financial, one can assume; financial in the form of taxation. After the reversal of the Unequal Treaties in 1894 the government did not initially raise import duties immediately, but in 1897 they passed a specific duty tax known as Law No.14 which raised the tariff on foreign beer to 25%. However, this was not passed on other types of alcohol, due to their low popularity at the time, and beers apparent growth. 59 In short, only once industries developed enough, 52 P.102 53 P.102 54 P.106 55 P.141 56 P.133 57 P.17 58 P.32 59 P.44
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would the government make money off of them. Furthermore, the government also implemented a domestic beer production tax in 1901, raised again in 1904. This was huge, as the tax essentially killed the majority of Japan’s small breweries overnight, since they were able to produce enough beer to meet the tax. 60 Weak firms fell pray not to the strong out of competition, but due to the tax policy by the Ministry of Finance. 61 Japan’s government sought to capitalize on the new advantage of domestic beer by taxing at the source, rather than point of sale. The protectionist trade agenda selected for the largest, most capable companies can be seen here. 62 The Ministry of Finance sent a clear message that only the strongest would continue to operate in the new century.63 Competition for quality amongst entrepreneurs would only slow this down. The government would continue to tax beer at higher rates far after this. Furthermore, as outlined above, it would step in to mediate mergers between companies. The industry had many invested players like Magoshi. He was not only Dai Nippon’s president, but also a member of the House of Peers, and heavily connected to Mitsui.64 The connection between business, the zaibatsu, and government is undeniable. With the coming of the Pacific War, the government would up its involvement via the National General Mobilization Law of April 1938. All of Japan’s economy and industries became state-directed and state controlled. In 1940, the Ministry of Finance revised the Alcohol Tax as a means to regulate and maximize its food supply. This system would remain in effect well into the Postwar Occupation era. 65 The Ministry also put further restrictions on the ingredients used to brew beer. 66 It is here that the once strong German tasting product slowly began the process towards the light and weaker product of today. In the pre-war era beer prices became fixed, and beer became classified as grade-B food stuff. Since sake was made of rice, a grade-A foodstuff, it was necessary to use it for food only. With this, the sake industry became unprofitable and by 1940 all brewers’ operations were terminated. 67 It was this moment where the government set it so that beer would overtake sake. Beer’s postwar fate to beat 60 P.45 61 P.45 62 P.53 63 P.54 64 P.100 65 P.113 66 P.114 67 P.112
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nihonshu would be determined. The Demise of Nihonshu As previously noted, nihonshu remained the favorable drink largely up until the war. Though, it began taking a hit even in the Meiji era. Sake peddlers were to be eclipsed by urban stand-up bars selling cold beer, which consumers quickly learned were more refreshing, and came in larger glasses. 68 Though, sake remained much less expensive, and still stayed popular amongst poorer classes during this time.69 It was a slow turn over, as beer grew bigger, sake began to be eclipsed. The study mentioned above stating that the ratio between the two was 7/1 already showed that by 1922 beer was becoming popular. However, sake remained the leading alcoholic drink for the average Japanese consumer. But as living standards rose in the late 1920s and into the 1930s, the tides naturally began to turn. 70 Largely though, it could be argued, due to the government involvement in war, not due to preference. Much of the rice was needed for the military’s efforts abroad, and the government began cutting the production by 1937. Having less sake available curbed consumers’ preference towards beer, and its production continued to grow.71 With the mobilization law of 1938, this would be almost guaranteed. Many of Japan’s Edo era brewers were hit hard, and this came as a huge psychological blow 72 During this time, nearly half of the nation’s sake brewers were diverted or abolished. Compared to the sake industry, beer brewers were treated rather gently. 73 Beer could be taxed and used due to the nature of its production, as outlined above. Sake would come back after the war, but it would never be the same. Beer’s production in 1955 to 1964 went from 400,000kL to 1.99 million kL. Sake had a market share of 36.9percent in 1955 while beer held just 29.3 percent. In 1959 these numbers became reversed, and by 1964 beer held 53.9% and sake held 34.6%. According to the Asahi nenkan, the reasons for beer’s rapid increase had to do with the rise in Japanese living standards, the number of female consumers 68 P.17 69 P.40 70 P.93 71 P.111 72 P.112 73 P.140
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drinking beer increasing, consumer’s tastes in alcoholic beverage shifting, and more homes equipped with heaters.74 Had the government not shut down these nihonshu factories, and propelled beer during the war era, it is heavily debatable whether or not beer should have ever overtaken nihonshu. Beer had been around for a very long time, and for these numbers to shift so drastically, while at the same time the government became heavily involved in both industries, one cannot ignore. Today, sake is suffering, and sits well behind even liqueurs in consumption75. With the rise of Cool Japan by Prime Minister Abe, maybe the industry may see some sort of a comeback, but for now it seems to be very niche, as almost beer was when it first came to Japan.76 Post-War Beer Genuine beer competition died off in the mid 1940’s. During this time beer companies had no need to spend money on promotional campaigns or advertising, and fixed profits were guaranteed. 77 Only several beers would exist and nihonshu would be out of the market for some time. Furthermore, the efforts of the Ministry of Finance to regulate beer recipes, production, distribution, taxation, and so on left a deep impression on Japan’s surviving brewers, extending far beyond the war years. 78The Ministry of Finance controlled the issuance of brewing licenses, and for the next 50 years it would keep all but three new firms out of the industry altogether.79 Between 1945 and 1949, the Ministry of Finance allotted 74.5% of available beer barley to Dai Nippon and 25.5% to Kirin. This decision effectively fixed the market shares of the two to a similar level that was determined pre-war.80 Furthermore, the Ministry of Finance supervised beer shipments under the Beer Distribution Control Company well into the post-war. 81With this, these two firms, plus the addition 74 P.181 75 http://www.japantimes.co.jp/life/2007/04/13/food/what-the-japanese-are-drinking/#.U8KIBfmSz0d 76 http://www.nytimes.com/2014/02/22/business/international/in-sake-japan-sees-a-potential-stimulus.html? _r=0 77 P.115 78 P.145 79 P.154 80 P.155 81 P.156
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of Suntory in 1962, would come to dominate the market entirely. 82 Under the passing of Law 207, also known as the anti-monopoly law, Dai Nippon would be one of the many Japanese firms to be broken up by the occupation. 83 However, it is argued by the successors of the company that its management anticipated this, and took almost anticipatory measures to split the company into two.84 Despite some initial name changes eventually the companies of Sapporo and Asahi came in to existence. 85 By this time beer became a brand. Mitsubishi came to drink Kirin exclusively, while Mitsui came to drink Sapporo exclusively, and Sumimoto went to drink Asahi. Sumimoto even purchased shares in Asahi to defend the company against a possible takeover in the 1960s. Sapporo states that during this time beer became the beverage of the masses (taishutekina nomimono). 86 Beer brands became powerful symbols of professional identity and affiliation. And from 1960, beer continued to eclipse sake and leave it far behind.87 The government maintained its system of pricing until June 1 st 1964. After this, brewers regained control over their pricing.88 By this time, Kirin had eclipsed its competitors and enabled it to set prices that were able to rival its competitors’ costs. By the mid-1980s Kirin maintained 60% of the market, Sapporo with 20%, Asahi 11%, and Suntory with 7%. Foreign brands were virtually unavailable outside of fancy hotels in big cities.89 Despite the breaking up of cartels by the occupation, they, and their connection to the government would soon return. The Ministry of Finance would act as a regulator between the four large breweries, and encourage that no domestic competitors could enter the industry without a license (unless the produced over 2,000 kL annually. Because of this, the retail price of beer would remain nearly identical for more than 30 years. Furthermore, in exchange for protection against foreign imports, domestic barley became used, despite being four times the price of the world average. This agreement was renegotiated annually and went unwritten, for it would violate former the General Agreement on Tariffs and Trade 82 P.187 83 P.159 84 P.160 85 P.176 86 P.184 87 P.191 88 P.188 89 P.189
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(GATT). 90 This would make a change however, as people began to become frustrated with the cartel of beers and their fixed pricing. As a rebellion against the fixed prices, major retailers began offering discounts for beer at their establishments. The return of Craft Beer and the rise of Third Beer Due to these rebellions, the Ministry of Finance at last opened up the market to other competition in 1994 by lowering the minimum output to just 60kL for a beer license. With this came the rise of local beer, and its slow reemergence in society. 91 Though, the industry would still barely make a dent in the market share of the big companies that already existed. At its highest point in the early 2000s, craft beer took up only around 5% of the market.92Big beer surprisingly lost overall during this period of time. However, it was not due to craft beer, but due to a new, even lighter product called happoshu, or third beer, which found its beginnings in the mid 1990’s.93 Happoshu and third beer, show something very interesting about Japanese society’s growing trend with alcohol. Since Asahi’s creation of Super Dry in 1987 and beer’s moving away from strong German taste in the Pacific War era, beer had become increasingly lighter and less flavorful. Now happoshu and third beer were produced, due to escaping higher taxes, using less than 25% malts. What is notable is that by 2001 the sale of this alcohol product accounted for 30% of the domestic beer market, led by all of the big brewers. In 2005 it increased to over 40% of the market. Of course, since it grew in popularity, the Ministry of Finance aimed to tax it even more, forcing the companies to make even lower malt products, to not malt at all but soybeans and other alternatives. 94 It is important to note that like fashion, consumer tastes in beer and beer-like products had become seasonal by this time.95 Happoshu and third beer show that for most of these consumers, beer became merely a beverage for clearing the throat, and thus beer-like beverages that taste similar are
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becoming the cheaper option.96 The Consumer Since the pre-war era, beer companies had used marketing tactics to target a larger audience. 97 In the 1920s and 30s, modern Japanese women modeled after Hollywood film actresses were heavily used.98Today, we can see actors such as George Clooney in the carts of trains with a Kirin poster. Since the war ended, however, the focus of beer companies changed. It was “product out, marketing in.” This meant that beer recipes, ingredients, or brewing techniques were decidedly cut out and Japan’s consumers were definitely in.99 Beer would turn into a consumer product, something that people wished to look into the mirror of advertising and see themselves.100 Initially, beer was chosen by the government to target government officials and rich foreigners in order to impress and reverse the unequal treaties. It was driven from the top down, and carried an expensive image to it. By the time the war happened, however, beer had become a cheaper product, used by the government to create revenues via its taxation. After the war, Kirin utilized unions to support its image101 and beer became a product for the masses, as noted previously by Sapporo. The controlled distribution era and supply shortage forced brewers to produce a lighter, less flavorful product. As noted by Kirin, this actually came to be preferred by consumers; especially, by women and young people.102 During the postwar era, women steadily gained rights due to the reforms made by the occupation. This atarashii sendai no josei had agreat deal of free time, and effect on beer. Due to this、 one could see the rise of women drinking beer at beer halls and beer companies began to target this.103 By the mid 1970s women were becoming seen more often drinking on television in dramas and commercials, and alcoholism in Japan rose overall. 104 In 1982, a study put out by Mitsubishi Economic Research Institute stated that 85% of Japanese men and 60% of Japanese women were regular 96 P.236 97 P.86 98 P.87 99 P.171 100 P.240 101 P.166 102 P.156 103 P.185
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beer drinkers. A significant shift from the time of pre-war. 105 With the rise of women drinking, actors being used in advertising such as Harrison Ford 106, and other marketing tactics assisted with the support of the steady continuation of big business beer by the government, we can see a trend as to how beer became such a commercial entity. 　 Interview with a Japanese Beer Bar Owner In order to confirm what the research was telling me, I desired to interview an actual Japanese person on this subject matter to see if his opinion matched. To do this, I interviewed a Takeshi Ishiguro, or Guro-san, who owns a bar named Hops125 in Ebisu. Guro-san runs a craft beer bar, and notes that it is only rich people who tend to drink the product. Oddly enough, craft beer seems now very similar to what beer began as. The product is heavily taxed by the government, expensive to import, and big beer companies continue to receive protection. For these reasons, the product will remain expensive. He makes note that while women drink craft beer, they do not tend to like bitter versions of it, and therefore tend to choose lighter products. For this reason, amongst regular women, and even at his craft beer bar, Asahi Super Dry is kept on the menu and became a favorable product amongst the Japanese people. Women and men equally like it for its simple flavor. According to Guro-san, women became much stronger politically after a Japanese law passed that equalized gender working rights around 10 years ago. After this, super dry became even stronger since women had an equal say in the market. Women, he notes, are a large reason why beer increasingly became lighter. Furthermore, men with money still seem to prefer stronger products like Yebisu, and bitter craft beers like IPAs. Moreover, younger people, due to their income, choose low alcohol percentage beer that is cheap. Because of women, and more importantly, an imbalance between the age groups and wealth distribution, we see a reason why happoshu and third beer are recently really catching on in Japanese society. Conclusion
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Was beer a product chosen by the people, or was it carried out by the top down? This paper argues much for the latter. From its beginnings it was given to the top of society and even created by the government. Entrepreneurs were cut out early on, and by 1901, before the industry was large, and those with power were allowed to continue to gain it. Do people really prefer beer to nihonshu? This is can be debated, but what cannot be is whether or not beer would have overtaken nihonshu as the national alcohol of choice had it not been for the government. The government shut down all sake factories for nearly a seven year period of time. With only two beer companies backed by zaibatsu, the government, and no competition, the government allowed them to gain dominance not only over the market, but over people’s preference. Within less than 10 years, the markets reversed. Once people were driven to buy beer, and women gained freedom after the war, they turned the product to fit their lighter preference. It no longer became necessary to focus on the product, as the product preferred was cheap and light. Marketing became a huge focus and people began to associate beer with celebrities and culture, not as a quality product in creation. So was beer chosen by the people? I think not. However, once it was given to them, they had no problem conforming the product to fit their needs. Despite even this, it became lighter initially because the government made it so. People just turned out to like it a bit more.