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Japan Fair Trade Commission raids major beer makers over price-fixing allegations

Japan's four largest beer companies were raided by regulators on October 7 over suspicions of coordinating wholesale prices. The investigation could lead to criminal charges.

By Hermes-Vector AI Desk

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Checked against 4 sourcesBBCau.finance.yahoo.comnewsonjapan.comhurriyetdailynews.com
Illustration for: Japan Fair Trade Commission raids major beer makers over price-fixing allegations

In brief

  • Japan's four largest beer makers were raided by the JFTC on October 7 over price-fixing suspicions.
  • The investigation focuses on coordinated wholesale price increases in April last year and October 2022.
  • Asahi, Kirin, and Sapporo saw share prices fall; Suntory's beer business is not publicly listed.
  • The probe is a criminal investigation that could lead to charges if collusion is confirmed.

Japan Fair Trade Commission raids major beer makers over price-fixing allegations

Japanese officials have raided the country's biggest beer makers over allegations they worked together to raise the price of their beverages. Asahi, Sapporo, Kirin and Suntory Spirits confirmed to the BBC that their premises had been searched by the Japan Fair Trade Commission (JFTC), adding that they would fully cooperate with the regulator.

The four firms dominate Japan's beer market, with their drinks a common sight in supermarkets and convenience stores across the country. Asahi, Kirin and Sapporo all saw their share price fall after news of the investigation broke on Wednesday. Suntory's beer business is not publicly-listed.

Investigation Details

According to the Japan Times, the investigation centres on the companies raising their prices in April last year and in October 2022. All four companies announced increases, citing the rising cost of raw materials as well as other factors such as energy and transportation.

The Japan Fair Trade Commission entered the Tokyo headquarters and other facilities of Asahi Breweries, Kirin Brewery, Suntory and Sapporo Breweries. The companies are suspected of coordinating the prices at which beer and other products were shipped to wholesalers over a period of several years, rather than independently setting prices as required under competition law.

Investigators are examining whether representatives of the four companies informally agreed on specific targets for the size of price increases. The suspected coordination is believed to have taken place around meetings of the Brewers Association of Japan, an industry organization to which all four companies belong. A regular gathering known as the Ichimokukai was generally held on the first Thursday of each month. Sales managers and other representatives from the four brewers are suspected of meeting before or after those sessions and discussing specific targets for price increases.

Company Responses

Kirin Holdings said its subsidiary, Kirin Brewery Company, was searched "on suspicion of a violation of the Antimonopoly Act". It said it takes the matter "very seriously", adding it would "fully cooperate with the Japan Fair Trade Commission's investigation and any requests for cooperation".

Kirin Holdings said: "At present, the impact of this matter on the company's financial results has not been determined. The company will promptly disclose any material developments as they arise."

A spokesperson for Suntory confirmed "an on-site inspection" had taken place "in connection with a potential violation of Japan's Antimonopoly Act relating to domestic alcohol trade practices". The company said: "We sincerely apologise for any concern or inconvenience this situation may cause to our customers, business partners, and other stakeholders. We will cooperate fully with the JFTC's investigation."

Asahi said it was "subject to investigation by the Japan Fair Trade Commission" and that it will fully cooperate with the regulator.

"I do not deny that an investigation is being conducted today, but I'd like to refrain from commenting on the details as a preliminary review is underway," JFTC Secretary General Iwanari Hiroo said, according to local media.

Market Impact and Context

The investigation comes shortly after changes to Japan's alcohol tax system took effect on October 1, completing the unification of tax rates across beer-type beverages. Under the changes, the tax on regular beer fell by about 9 yen, while taxes on low-malt happoshu and so-called third-category beer rose by about 7 yen.

According to the National Tax Agency, the domestic beer market was worth about 1.15 trillion yen two years ago, meaning any widespread price coordination could have had a significant impact on consumers.

The latest action is being conducted as a criminal investigation under a special procedure used by the Fair Trade Commission when suspected violations are considered particularly serious and likely to have a broad impact on people's lives. Under that procedure, investigators obtain warrants from a judge allowing them to search premises and seize evidence.

It follows an investigation by the regulator in June over alleged cartel activity by some of Japan's biggest ice cream makers, including Meiji and Pocky maker Ezaki Glico.

Why it matters

The probe highlights the Japan Fair Trade Commission's increased scrutiny of price coordination in consumer goods sectors. If the allegations are proven, the companies could face criminal charges and significant fines. The case also raises questions about whether consumers paid higher prices due to restricted competition among the country's dominant brewers, who account for nearly all domestic sales.

Sources

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.

Questions readers ask

Which companies are being investigated by the Japan Fair Trade Commission?
The Japan Fair Trade Commission raided Asahi, Sapporo, Kirin, and Suntory Spirits over allegations of price-fixing.
What are the companies suspected of doing?
The firms are suspected of coordinating the prices for beer and other products shipped to wholesalers rather than setting them independently as required by competition law.
When did the price increases that are the focus of the investigation take place?
The investigation centers on the companies raising their prices in April of last year and in October 2022.
Where did the suspected coordination meetings take place?
The suspected coordination is believed to have occurred around meetings of the Brewers Association of Japan, specifically during or around the regular Ichimokukai gatherings held on the first Thursday of each month.
Why is this investigation considered significant?
The probe is significant because the domestic beer market was worth about 1.15 trillion yen two years ago, and the companies account for nearly all domestic sales, meaning widespread price coordination could have significantly impacted consumers.

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