Japanese brewer fined for selling ‘imitation beer’

Japanese officials have slapped I.N. International with fines after discovering that the brewery was mislabelling products as beer to qualify for a reduced tax rate.

Under Japanese liquor laws, beverages must contain no added sugar or sweetener in order to be legally considered beer. Products which contain added sugar are instead classified as ‘imitation beer’.

According to Japanese newspaper The Asahi Shimbun, where this story was first reported, I.N. International began adding sugar to its canned alcoholic drinks in 2020 during the Covid-19 pandemic, to extend their shelf life following a surge in demand.

However, the brewer continued to label the products as beers over the next three years.

An investigation by the Osaka Regional Taxation Bureau revealed that I.N. International had been selling its imitation beer products as beers, benefitting from a 15% tax liquor tax reduction awarded to small brewers.

I.N. International had received more than 4 million yen (£22,000) in tax breaks for beer during those three years, the investigation revealed.

The brewer, based in the Kita Ward of Japanese city Kobe, is known for producing Rokko beer. It will likely be required to pay the 4 million yen, plus fines, for underreporting its taxes, The Asahi Shimbun has said.

Manabu Nakajima, president of the Japanese brewery, declined to recount detailed “brewing methods or tax matters” in response to an Asahi Shimbun inquiry.

“We strictly select ingredients and processes for production in accordance with the law,” he said. “We have stepped up efforts to eliminate any discrepancies in legal interpretation, following the advice of a tax accountant knowledgeable about liquor taxes.”

In other news, Tokyo’s Shibuya district has banned public drinking, hiring 300 private security guards and urging local stores to stop selling alcohol to ward off revelers this Halloween. Read more on that story here.