TOKYO REPORT: Japan Moves to Help Sake Breweries Hit by Surge in Rice Prices

Tokyo, Feb. 9 (Jiji Press)–Sake breweries across Japan are struggling to secure funds to purchase “sakamai,” rice used for sake production, as its price has risen sharply. Prices of sake rice have been soaring in line with the steep rise in the cost of staple rice. The sudden spike has given breweries little time or leeway to reflect the higher raw material costs in retail prices, squeezing their profit margins. In response, the National Tax Agency, which has jurisdiction over the liquor industry, is launching a first-of-its-kind support program to foster direct partnerships between breweries and farmers, aiming to secure a stable, long-term supply of sake rice. Amid Global Opportunity The price of sake rice harvested in 2025 is about 1.5 to 2.3 times higher than that of sake rice produced the previous year. The surge followed a sharp rise in the price of staple rice. In October 2025, the average staple rice price for all brands reached 37,058 yen per 60-kilogram sack, up 13,238 yen from a year earlier. The sake industry is enjoying an opportunity to expand sales. In December 2024, Japan’s “traditional knowledge and skills of sake-making,” which use “koji” mold, were registered as a UNESCO Intangible Cultural Heritage. Seeking to capitalize on this momentum and boost exports, the National Tax Agency has been actively promoting sake at venues such as the 2025 World Exposition in Osaka, western Japan, as well as at business meetings overseas. However, since around the summer of 2025, rising prices of staple rice have prompted many farmers to shift their production toward these more profitable varieties. The trend has raised concerns about a decline in the production of rice specifically grown for sake brewing. High-quality sake rice is essential for brewing good sake. If its production falls, breweries struggle to secure adequate supplies. Even when they are able to obtain the rice, the increased procurement costs place significant financial pressure on small and medium-sized breweries. Viewing the situation with concern, the agency has strengthened financial support while simultaneously exploring new assistance measures for breweries. Local Govt Aid Under a new initiative, the agency will provide subsidies of up to 1 million yen per project for events such as sake competitions that feature products made with locally produced sake rice. The goal is to promote closer collaboration between sake breweries and farmers and help build a stable supply environment for sake rice. Funding for the initiative was included in the fiscal 2025 supplementary budget, which was enacted in December 2025. “In many cases, sake rice is traded through intermediaries, so breweries have little or no direct contact with farmers,” said an official at the agency’s liquor industry and export promotion office. “Through this support program, we want to foster relationships where both sides can meet in person.” The agency is also urging local governments to make active use of a special framework of local allocation tax grants–under which each municipality can flexibly deploy funds according to its own priorities–to provide targeted support for sake breweries in ways that reflect local needs and conditions. The government has allocated a total of 2 trillion yen for the tax revenue grant framework under the fiscal 2025 supplementary budget. In addition, the economic stimulus package approved by the cabinet in November 2025 includes measures to ease the financial burden on sake breweries facing soaring sake rice prices, as part of broader efforts to mitigate the impact of inflation. According to a survey by the National Tax Agency, by January 2026 a total of 26 prefectures had introduced support programs for sake breweries, some of which make use of these tax revenue grants. In Yamagata Prefecture, northeastern Japan, the prefectural government subsidizes half of any increase in the price of locally grown sake rice in proportion to the amount purchased. In Hitoyoshi, Kumamoto Prefecture, southwestern Japan, the city government uses its own funds to provide benefits to member breweries of the local brewers’ association, also in line with their purchase volume. END [Copyright The Jiji Press, Ltd.]