TOKYO – Shochu Rather, policymakers wishing to profit from the dismantling of import barriers by the United States and Europe face a serious regulatory hurdle at home.

Late last year, the United States relaxed import rules on the size of shochu bottles, allowing distillers to ship spirits in their traditional 720 milliliter and 1.8-liter bottles. Previously, they had to repackage their liquids exports, a requirement that many saw as a non-tariff barrier.

The European Union relaxed its rule on bottle size in 2018.

With the export opportunities thus presented, more and more shochu manufacturers are turning to overseas markets.

“The world has not yet discovered shochu,” said a representative from Hamadasyuzou, a Kagoshima Prefecture distiller who in May unveiled Daiyame 40, a sweet potato-based shochu exclusively for export markets.

Hamadasyuzou designed the Daiyame 40 shochu exclusively for overseas markets.

The alcohol content of the liquor is 40%, about double that of regular shochu. The high content, said CEO Yuichiro Hamada, “makes it suitable as a cocktail base.”

Kirishima Shuzo, distiller from Miyazaki Prefecture, is preparing to conduct market research for the first time in the United States, China and Southeast Asia this summer. The company, known for its Kuro Kirishima brand, expects potential demand from consumers who have had to spend more time at home due to the pandemic.

Yet Japanese “color” regulations hamper the efforts of the shochu industry at large to market its beverages overseas. Regulations, established by the National Tax Agency in the 1950s, require that the color intensity of a shochu spirit be about a tenth of that of regular whiskey. It was established to distinguish shochu from whiskey.

The problem, distillers say, is that in Japan they are forced to remove the amber color that abroad can be seen as a hallmark of high-end spirits.

“Colorless drinks are not very popular abroad,” said Rokuchoshi-syuzou president Michito Ikebe. The Kumamoto Prefecture Distiller changes the color of his shochu by filtering it through charcoal.

“Exporting shochu remains difficult unless regulations on color are relaxed,” said Taiki Nakayama, chairman of Tokyo shochu exporter Nanzan Bussan. “Regulation of color distilled beverages is rare outside of Japan.”

Visitors taste Hamadasyuzou’s premium shochu at the Smithsonian National Museum of Natural History in Washington.

There are two categories of shochu. the ko type is repeatedly distilled to remove impurities, while the otsu type uses the unique traditional distillation method to retain the rich flavors and aromas of key ingredients.

Otsu shochu can acquire an amber tint, like whiskey, when aged in wooden barrels. But under current regulations, stills must filter color.

Regulators are not sympathetic, with one government official claiming that the distillers have only themselves to blame. While negotiating with other countries to lower trade barriers, the Japanese government polled the shochu industry on relaxing color regulations. But some manufacturers objected, fearing the move could lead to the loss of their preferential tax treatment, the official said.

The whiskey tax rate was reduced during the 1980s and 1990s in response to demands from the United Kingdom, which was trying to increase exports of Scotch whiskey to Japan. However, the tax rate on shochu with an alcohol content of less than 37% remains lower than that of whiskey.

Some shochu makers fear that if the color regulations are removed, whiskey and shochu will be treated equally and shochu will lose its preferential status. Companies that don’t have shelf-stable drinks in their lineup vehemently opposed the easing.

In fact, the Color Regulation largely lost its meaning as a means of distinguishing shochu from whiskey in February, when Japan defined what constitutes Japanese whiskey based on the use of domestic water and d other factors.

Exports of shochu lag behind other alcoholic beverages. Over the decade to 2020, annual shochu exports remained stable at around 1.5 billion yen ($ 13.5 million). Whiskey exports, which in 2010 were at a level similar to that of shochu, increased 23-fold to reach 27.1 billion yen in 2020, while sake exports that year reached 24.1. billion yen.

To boost overseas sales of shochu, the government included premium shochu in a targeted export campaign in November. The goal is to more than triple the value of shochu exports to 4 billion yen by the end of 2025.

Yet some distillers are impatient, unable to sell their product under the name shochu. A few have started to market their drink as a liqueur by adding dietary fiber. If this practice spreads, according to one observer, the Japanese shochu industry could lose its credibility and therefore foreign markets.

Shochu also has a battle on the home front, despite government efforts to support the industry. Shochu sales in Japan have declined by approximately 25% in volume since the peak in fiscal 2007.

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