JAPAN'S SHIFTING ALCOHOLIC PREFERENCES.

As Japanese consumers become acquainted with a wider variety of imported alcoholic beverages, wine and cocktails are gaining market share against beer. Japans leading brewer, Aahi Breweries Ltd., recently projected that its sales would be flat during 2004.

Sales of Aahis beer brands slipped by 5.5 percent in 2003, but sales of low-malt happoshu beverage came on strong. Management expects that sales growth for its low-malt product will exceed 15 percent this year, offsetting poor performance of traditional beer brands. Japanese consumption of cocktails and wines rose during 2003. The national currency (the yen) gained about 25 percent in value relative to the U.S. dollar over the past two years, and that gives a cost competitive edge to imported beverages. Look for sales of Japanese cocktail ingredients to rise by more than 10 percent, while sales of imported ingredients and wines will rise at a rate approaching 5 percent.