The Diet passed a bill Wednesday to extend restrictions on the opening of new shops selling alcohol in "highly competitive" areas for another year to protect small and midsize liquor stores.

The House of Councilors unanimously approved the bill, which cleared the House of Representatives in late July.

Alcohol sales were liberalized in principle in September 2003. At the same time, however, the government enacted a law restricting the opening of new liquor stores at 1,200 locations designated as "highly competitive" areas, for a two year period.

The law is intended to protect long-standing small and midsize liquor shops from having to compete with large retailers, including supermarkets and convenience stores.

Fewer consumers are buying from their local liquor shops, preferring to drive to the big retailers and buy large amounts of alcohol.

Weak liquor shops inside or outside the designated areas have already been forced to exit the market, an industry source said.

Supermarket and convenience store chains criticized the extension for stopping new entrants into the market, saying it runs counter to the government's policy of promoting deregulation.

Small and midsize liquor shop owners have said they wanted the extension so that large retailers could take the year to introduce effective measures to prevent minors from purchasing alcohol.