Grainswest - Fall 2026

Fall 2026 Grains West 44 This is of interest to malting barley farmers. In Japan, this broader shift has been described as biru kaiki, or a return to beer. BY PETER WATTS Japan’s “return to beer” an opportunity for Canadian barley JAPANESE BREWERS FOUND A unique way to make beer more afforda- ble: use less malt. But what happens when using less malt no longer makes these products cheaper? To answer this, we must look back more than a century. During the Meiji era of 1868 to 1912, the Japanese government increasingly relied on liquor taxes as the country industri- alized. By the early 1900s, liquor taxes ranked among Japan’s largest source of national tax revenue. A beverage was required to contain a malt content of at least 67 per cent to qualify as beer, and, as such, carried a higher tax rate. This tax structure contin- ued to shape Japan’s beer market into the 21st century. When household budgets tightened during Japan’s economic downturn of the 1990s, consumers sought lower-priced alternatives. Brewers saw an opening and reduced malt content to move products into lower tax categories. These spar- kling liquor happoshu and ultra-low malt “third category” beverages offer beer-like flavour and drinking experience and have become a significant part of Japanese brewers’ portfolios. Since 2020, however, Japan has been modernizing its alcohol tax system. In October, the excise tax on beer and beer-like beverages converged at ¥54.25, or about $0.50 per 350 mL. Tax now accounts for roughly 25-33 per cent of the retail price of a typical can. In response, certain brewers have re- turned to beer. Suntory, for example, has reformulated its popular Kinmugi brand by removing its spirit component, in- creasing malt content above 50 per cent and rebranded it as beer. The company’s 2026 sales target is 35 million cases, an 18 per cent increase from 2025. Market share of Japan’s beer and beer-like bever- age market also rose from 41 per cent in 2020 to 55 per cent in 2024. This has changed the economics of beer production and consumption. While brewers no longer have the same tax incentive to keep malt content low, con- sumers may continue to buy happoshu for price, taste or health characteristics, while others move toward conventional, premium or craft beer. This is of interest to malting barley farmers. In Japan, this broader shift has been described as biru kaiki, or a return to beer. If brewers continue to increase malt content in established brands, or if beer continues to gain share over lower malt categories, it could point to addi- tional opportunities for malt demand. And beer is only part of this expanded malt picture. Japanese whisky has built a strong international following, and distillers are adding capacity in response. For much of its modern history, Japan had fewer than 10 whisky distilleries. By 2024, it had more than 100. Zoom out and the opportunity broad- ens further. Japan imports more than one million tonnes of barley annually, mak- Taxchange invitesmoremalt THE MALT HOUSE ing it the world’s third-largest barley im- porter. Most goes to livestock feed, while brewers, distillers and food processors use smaller volumes. However, Japan also purchases more than 450,000 tonnes of processed malt per year, making it the world’s third-largest malt market. Canada plays a major role in this trade. In 2025, Japan was Canada’s second-largest export market at 600,000 tonnes of barley and 115,000 tonnes of processed malt. Beyond beverages, Japanese food processors use barley in products such as barley tea and as a rice extender. This gives Canadian suppliers another path into the market. As Japan’s barley market evolves, Canada has room to build on an already strong position across brewing, distilling, food and additional uses. In spring 2027, the Canadian Malting Barley Technical Centre (CMBTC) will lead a delegation to Japan. We look forward to working with colleagues across the brewing, distill- ing and food industries to strengthen existing relationships and identify new opportunities for Canadian barley and malt. Peter Watts is the CMBTC managing director.