Japanese Beer Consumption

How does the state of the market for certain goods reflect on our overall economy. This question is explored in the beginning line of Cheers, Japanese Beers by Hiroyuki Kachi: “If the country’s thirst for beer is anything to go by, Japan is back in the groove.”

http://blogs.wsj.com/japanrealtime/2011/08/10/cheers-japanese-beers/

Beer consumption is up by .4% over last year in the same month to 47.37 million cases. This is the first year to date gain since 3/11.

It is unclear whether in Japan beer is a normal good, whose consumption should decrease during a recession, or a vice-good that is immune to  recessions in Japan. For comparisons sake, in America the evidence points to beer being a vice good. Durring the height of the great recession, the consumption of beer was down less than 1% in Nevada and Utah according to a study by Donald G. Freeman at at http://www.beeronomics.org/papers/1A%20Freeman.pdf

~Anton Reed

4 thoughts on “Japanese Beer Consumption

  1. the prof
    Beer consumption per capita has been falling in both the US and Japan; consumption in the US is also higher among younger (=poorer) age brackets. Econometric studies bear this out: beer is (weakly) an inferior good. So good to phrase in this way!! Of course that then begs the question of why the recent uptick. My hunch is that product innovation and new marketing lies behind it, with some of the innovation arbitraging the tax definitions of beer [non-beer-like ingredients, lower alcohol levels] to allow a lower price point.
    BTW we use a book on the beer industry in Econ 243 Industrial Organization, there are a handful of economists who have done substantive work on the industry (and in the days of multiple mergers, the 1950s-1960s, there were presumably lots of background studies for antitrust authorities and their private-sector counterparts, but most of these were never made public).
    Reply
  2. myers

    In my marketing class, I did a term project on the beer industry and the recent jump in the beer market is due to a combination of its growing availability in major chains like Walmart and Walgreens, and an explosion in the craft beer segment. I don’t know if this is transferable to Japan, but I can’t see this as an indicator of Japan’s economy getting back in the “groove”.

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  3. tommd13

    I agree with Dillon on the craft beer segment. It has been a recent fad for people to make their own craft brews. I have a handful of friends that have been doing low quantity brews themselves, but within the last year or so many locally brewed beers have showed up on menus in restaurants and bars I frequent. As distribution becomes more efficient these beers will be able to travel farther. I believe it is deemed as a type of hobby both in production of these and sampling them that gives people something to talk about. It will be interesting to see if Japan’s beer consumption continues to go up, what will happen to the economy even though personal spending has shrunk.

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  4. Stefan S.

    I just read a small term paper by same(?) Anton Reed called: “Changing Alcohol Demand”, where he seems to WANT to make beer a vice-good on the Japanese market. He ultimately confuses his findings of no-such-correlation when looked upon society-as-a-whole and makes an apple-pear comparison of the highly successful marketing ppl at Kirin Brewery, and how they managed to uphold sales, even if the Japanese economy was in recession.

    http://econ272.academic.wlu.edu/term-paper/changing-alcohol-demand/

    I’d argue that beer is not a vice-good in Japan (given the data of that paper) and that Kirin’s marketing ppl simply beat the market!

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