The Nikko Brewery (http://www.nikkobeer.com/...) is on the outskirts of town. Go up the main street towards the river. Cross the river near the red bridge then take a right and keep going. It'll be about 700m or so on the left side. Their Nikko Beer is a pleasing pilsner style lager, served in a glass or a large handle for around 800yen. Very nice, crisp and refreshing and definitely best on tap. They sometimes have some seasonal brews on hand, such as dark, amber, and special ales.
There is a small alcohol shop across from the station that is run by an old couple and has an interesting selection of world beers.
