Japan Urges Young People to Drink More to Boost the Economy

August 19, 2022

Declining alcohol consumption among the nation’s youth is causing alarm in the halls of the Japanese government, as the trend is putting a big dent in the country’s tax revenue.

The average Japanese adult consumed about 100 liters a year in 1995, but consumption plummeted to 75 liters in 2020. Meanwhile, alcohol taxes declined from providing 5% of Japan’s tax revenue in 1980 to just 1.7% in 2020. The drop in revenue from 2018 to 2020 was the largest in 31 years.

To reverse this trend, the National Tax Agency has launched a national competition to come up with ideas to boost alcohol sales.

The “Sake Viva!” campaign hopes to come up with a plan to make drinking more attractive for young Japanese. The contest asks 20 to 39-year-olds to share their business ideas to increase demand among their peers – whether it’s for Japanese sake, whisky, beer, or wine.

The officials running the campaign attribute the slowdown to the Covid-19 pandemic. Restaurants and bars closed and with everyone working from home, drinks with colleagues after work are less common. Izakayas, the Japanese version of a pub or tavern, have been hit particularly hard, with the latest available figures showing sales halved from 2019 to 2020, according to the Ministry of Economy, Trade and Industry.

In reality, the decline likely has more to do with demographics than changing work habits. The World Bank estimates that nearly a third (29%) of Japan’s population is aged 65 or older, the highest proportion in the world, and the Financial Times notes that “a fall in the total volume of alcohol consumed in Japan was inevitable once the indigenous population began to shrink over a decade ago.”

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