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Japan. Retailers move into brewing

Major retailers are stepping up efforts to compete with leading beer manufacturers by developing and marketing low-priced house-brand beer.

In recent years, these retailers have been increasing their sales of low-priced beer and beerlike beverages as the domestic beer market shrinks.

The market includes conventional beer, low-malt happoshu and no-malt "third-category" beerlike products often made with soybeans, corn or peas.

The private brand beer items marketed to date are mainly third-category items.

Supermarket chain operator Aeon Co. started marketing its own beer product, Topvalu Barreal Lager Beer, on Tuesday. Aeon's new product is the nation's first private- brand regular beer. The 350-milliliter can of Barreal beer is priced at 158 yen, about 20 percent to 30 percent cheaper than rival products marketed by major beer companies. Aeon has said it aims to sell 100 million cans a year.

According to Aeon, the low pricing is made possible by measures such as outsourcing the beer's production to a South Korean brewer and cutting shipping costs with the use of its distribution networks.

Kenji Horii, general manager of Aeon's Topvalu merchandise division, said Monday at a press conference, "We've now reached the point that we need to reconsider the conventional wisdom in the beer industry."

Another leading supermarket chain operator, Daiei Inc., released the third-category beerlike product "Neu Welt" in 2007, while Seven & i Holdings Co. introduced a similar product called "The Brew" in 2009. Other retailers also have focused on third-category beerlike products for their house-brand products.

Home center chain operator Cainz Home has also made inroads into this field by launching its "Kogane" beverage in August last year. Such beerlike products are priced 10 percent to 40 percent lower than beer products from major brewers.

In the first half of this year, shipments of third-category beers developed by retailers are estimated to rise to 7 million cases, a 70 percent increase from the previous year, accounting for more than 3 percent of the nation's beer market.

Major brewers have begun to view such private-brand products with trepidation.

"As the economy has stagnated, low-priced private-brand items are likely to establish their position. We have to fend them off by improving our brands," an official of one brewer said.

10 Aug. 2011

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