Sapporo Breweries has reportedly become the first major Japanese beer maker to warn of flat domestic beer sales this year.

Earlier this week, rival brewers Asahi, Kirin and Suntory all forecast rising beer sales, despite a sluggish Japanese beer market.

However, according to local reports, Sapporo said today (13 January) that it expects its domestic beer sales in volume terms to be flat at 71.1m cases in 2006. Sapporo has forecast that the overall beer market in Japan will shrink 2% on year in 2006.

Nevertheless, Sapporo, Japan's third-largest beer maker, is betting that its beer-flavoured drinks will drive sales and outperform the rest of the industry. Sapporo, which started Japan's so-called "third beer" segment two years ago with the launch of Draft One, expects the segment to continue to grow, despite an imminent tax hike on "third beer" products.

In May, the Japanese government is set to increase the tax on "third beer products" by JPY3.80 per 350ml can. Nevertheless, Sapporo has forecast a 19% leap in sales of its third-beer products, offsetting its prediction of a 2% fall in regular beer sales.