Boozing Japan -- Government to Deregulate Licensing

Many non-alcohol retailers are entering the market, anticipating the deregulation of population quotas for liquor licensing in September.

JAPAN IS ONE OF the few countries where you can buy booze 24 hours a day -- and it is about to become boozier. Many non-alcohol retailers are entering the market, anticipating the deregulation of population quotas for liquor licensing in September.

Pizza-la, a pizza-delivery chain operated by Four Seeds, is a prime example. Between February 26 and March 4, Asahi Breweries offered a free beer to customers who order a medium or large pizza from Pizza-la's roughly 500 stores nationwide.

An Asahi Breweries' spokesperson says that the free-beer-for-pizza campaign was designed to market its new low-malt beer, Sparks. This was only a limited opportunity, but the Japanese media reported that Four Seeds recently obtained a liquor license for one of its shops here in Tokyo. Beginning this spring, the company will take orders for beer, wine and other alcoholic beverages together with pizza orders.

Many companies have entered the liquor market over the past decade, since the first deregulation in 1993 allowed retailers with a certain amount of floor space to sell alcoholic beverages. Other regulations were lifted when the government decided to deregulate licensing further in 1998. According to a major weekly, Sunday Mainichi, about 50 percent of liquor is sold through large-scale retailers, including convenience stores, supermarkets and discount stores. The September deregulation will ease population quotas for licensing. Currently, Japan allows only a limited number of licenses, contingent upon the population of a target area.

New entrants this year include a retailer, Ryohin Keikaku, commonly known by its "Mujirushi Ryohin" brand, and a major drugstore chain, Matsumotokiyoshi. Ryohin Keikaku already sells wine and other liquor at some of its outlets, but the company expects an increase of sales after September, when Matsumotokiyoshi is expected to debut in the market, according to the Nihon Keizai Shimbun.

Already, there are over 177,000 stores licensed as liquor retailers, and a sharp increase is expected after September.

However, as is often the case in Japan, market "liberalization" doesn't mean that everyone can obtain a license upon request. The tricky part is that the National Tax Agency will remain as the license issuer. An advisory panel is discussing the possibility of retaining certain key regulations to protect weaker players. Small stores, for example, already suffering from the sluggish economy, are aggressively resisting total liberalization.

Obtaining booze will be easier for consumers, but competition among retailers is bound to be severe.