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The Made Under License Explosion

Is it Japanese or is it an imposter?

Is it Japanese or is it an imposter?

Over twenty-five years ago, I sat in a bar in New York City with two friends. The bar was revolutionary then.It featured a huge menu of beers categorized by country.  At that time, if you were to see a few foreign beers on a menu, they were always of the international industrial variety:  Stella Artois, Heineken, Beck, Kronenbourg.

Actually, this New York bar with the huge beer selection was no different.If you wanted a beer from New Zealand, you'd get a Steinlager, New Zealand's biggest export beer.It's just that back in 1989, no one had heard of Steinlager yet.  Similarly, were you to select an Argentine beer, you'd get Quilmes.  All these beers were or were soon to be owned by multinational beer conglomerates. Do you think any of us cared? We were just happy to be trying 'exotic' beers from locations far afield.

Today, of course, you can walk into a number of bars, Bangkok included, and have more choice in country and quality than this unusual New York City bar from the 1980's. Many of those multinational brands I first got a glimpse of in that New York bar are now more accessible – and infinitely more local.

Let's take the Asahi or Kirin you imbibe in a local Japanese izakaya.It's always billed as Japanese beer and a premium is charged for it.  On menus which like to document the "origins" of a beer, you'll often see something like "Asahi (Japan)". While it's true that the brand names of Asahi and Kirin belong to Japanese companies, the Asahi and Kirin you sample in Thailand are made under license in Thailand by local brewers.  Asahi is manufactured by Boon Rawd, makers of Singha; Kirin, by San Miguel Breweries of which Kirin already owns a 48% stake.  The only imported Japanese beer in Thailand is Sapporo, but it, too, is not brewed in Japan, but in Vietnam.Beers manufactured in ASEAN countries incur lower duties than beers manufactured outside the region.

This licensing scheme is not limited to Thailand. Big breweries have been doing this for years to expand market share while minimizing their risks. Asahi's most famous products, its Super Dry beer, served in the silver can with black lettering, has only been around since 1987, but it's now a world famous and popular brew due to strategic partnerships.In huge and lucrative markets with very little local protection, such as the United States, Asahi will setup its own American branches, Asahi Beer USA Incorporated. In the Chinese market, Asahi will operate via a combination of their own breweries and joint operation with a powerful partner – Tsingtao in this case of which Asahi also owns a piece.In smaller markets with protected beer markets, Asahi has its beer made under license by a local powerhouse. In Canada, Molson produces it; in Malaysia, Carlsberg.

Now here's where things can get tricky.  We're likely to think of an Asahi beer in a can and in a bottle as identical products in two different containers.In a smaller market like Thailand, that would be true.  All Asahi beer available in the Kingdom is brewed by Boon Rawd.If tomorrow, Asahi wanted to sell its products in milk cartons in Thailand, Boon Rawd would be the ones behind it.  But in larger markets, the bottled version is usually locally produced whereas the cans are imported.In the United States, you can find Canadian Asahi brewed by Molson as well as the real deal made in Japan.In the much smaller Korean market, right next door to Japan, both the bottles and the cans are imported from Japan.

This knowledge of licensing arrangements can make you question why you're paying a premium for 'imported' brews.While visiting China and Korea, I noticed that Belgium's Hoegaarden was being sold for very reasonable prices though still at a premium compared to truly local beers.  Examining the label, I saw that this 'premium' Hoegaarden was actually brewed under license in China.

Heineken is one of the pricier mainstream beers in Thailand, and yet it's made in Thailand.For the Australian market, Heineken is brewed in Australia.  Is it really Dutch beer anymore?   Australia's Fosters Lager's famous slogan in North America is "Australian For Beer," and yet in North American Fosters is brewed in Canada. Is it really worth paying the foreign exclusivity premium when the beer is actually local?

I suppose that depends if people drink a particular beer for its image or for its taste.  Among the multinational giants, image appears to play a greater role in convincing a consumer to purchase.In advertisements, a beer will be shown catering to a specific market segment.A consumer who probably has very little taste in beer to begin with will gravitate toward certain brands because he feels they define him.

But for someone like myself who drinks beer for its taste, I needed to resolve the matter:  does a beer brewed under license taste anything like its namesake in the motherland?

I expect it comes down to a brand – how much is that brand about the quality of the product itself?  Some brands just want to get their name out there.They could care less if the local Beer Crap Brewery is willing to brew it to substandard recipes as long as the beer sells.  Over a summer I was given a chance to run my own 'under license' taste test experiment.I was visiting Japan and Korea and brought back a number of Japanese branded beers to compare with the Japanese brews from Southeast Asia made under license:

ASAHI            Japan and Thailand

KIRIN             Japan, China, and Thailand

SAPPORO      Japan and Vietnam

The Asahis didn't taste exactly the same but close enough.The Thai version wasn't a steep decline in quality.The Kirin tasted noticeably different.The Japanese version had a floral scent.The Thai version was a little less bitter and little less fragrant, but still tasty.The Chinese version was syrupy and almost undrinkable compared to the other two.Sapporo was also a big come down.The Japanese version was far superior to the Vietnamese one.  

McDonald's is finicky that a Big Mac produced in the USA tastes like a Big Mac produced in Thailand despite the fact that the ingredients are sourced locally for each. Multinational brewers could make the same stringent requirements if it mattered to them.Most of the time, it doesn't. You're drinking a name.

If you like to sip the finer things in life and those finer things, you believe, come from abroad, make sure the finer things are actually fine and come from overseas before you start toasting beer glasses and shouting "Bottoms Up!"

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