Japan’s dwindling sake consumption suffers further with US tariffs

ABC NEWS (Australia)

Few countries in the world have felt the pressure from US President Donald Trump's tariffs quite like Japan. Initially hit with tariffs of at least 25%, the export-orientated country recently struck a deal to cut them to 10%. Car and electronics makers are worried, but another industry, the rice wine sake, is also vulnerable.

Transcript

00:00It's Japan's most iconic drink, suffering from a popularity problem at home.

00:08Across the world, all the national alcoholic beverages are struggling.

00:13At sake breweries in Yamagata prefecture, workers are scurrying to ensure sake is ready for delivery.

00:20It's a popular gift during the hot summer months.

00:24But the reality is, domestic sake consumption is only a third of what it once was.

00:29Sake consumption has been falling quite a lot.

00:33Sake is becoming less and less familiar to young people, who nowadays tend to drink low strength, sweet alcoholic beverages.

00:40It's not all bad news.

00:42Exports have boomed over the past decade, riding on a surge of Japanese cuisine.

00:47They make up around 10% of sales, and many breweries want to double that.

00:53But that's now an even greater challenge.

00:56With new tariffs from the US, Japan's most important market.

01:02Raising tariffs may strangle US domestic consumption.

01:05Sake sales have flatlined since President Trump's tariffs were first announced in April.

01:11A recent deal saw these taxes drop from 25% to 15%, but it's still costly.

01:18In the US, they sell our sake several times higher than our wholesale.

01:24We want to reach as many people as possible.

01:26Sanctions aren't the only price problems for sake.

01:30Here in Japan, there's a rice shortage.

01:33Prices reached such extraordinary levels, the government had to intervene and open up emergency reserves.

01:41But the damage had been done.

01:43Sake rice up 30% in a year.

01:46That's unprecedented.

01:48Sake breweries have no choice but to raise the cost of their products.

01:53Putting a lid on affordable sake.

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