Frozen Beef Tariff Plan Sends Chill Down Retailers' Spines

JAPAN - Domestic retailers are concerned over the government’s planned safeguard measure for frozen beef, as it will likely hit the nation’s restaurants and supermarkets hard.
calendar icon 28 July 2017
clock icon 2 minute read

The Japan News reports that restaurant chains use frozen beef from the United States and major supermarkets sell beef products, prompting fears about implementation of the safeguard.

This would temporarily raise the import tariff rate from 38.5 per cent to 50 per cent, which will lead to a rise in wholesale prices.

US beef is fatty, so it is good for such dishes as grilled meat, steak, Salisbury steak and gyudon beef bowls. It is also widely used as an ingredient in side dishes.

At major gyudon chain restaurant operator Yoshinoya Holdings Co., 90 per cent of the beef used in its dishes is frozen beef from the United States.

An official of Yoshinoya expressed concern regarding the possible imposition of the safeguard.

"We’re quickly gathering information on this matter," the official said. "We’re concerned [an increase in purchasing prices] will affect our business performance."

If imposed, it would be the first safeguard measure implemented in Japan in 14 years.

A supermarket chain operator in the Tokyo metropolitan area also voiced concern.

"If prices of frozen beef from the United States rise, it may result in an increase in the prices of chilled beef," an official of the firm said.

If the safeguard measure affects chilled beef sold at supermarkets, domestic consumers’ wallets are also certain to take a hit.

Demand for beef is rising due to barbecues and other events over the summer vacation season, leaving retailers perplexed by the government’s move.

"Consumers are sensitive to prices," said a retail industry insider. "There are price battles with other stores, so we can’t pass the increase in wholesale prices on to consumers."

Skylark Co., which operates restaurant chains including Gusto, seemed sanguine about the envisaged safeguard measure.

"We’ve secured a certain amount of beef in advance, so we won’t be affected by this at present," an official of the firm said.

Major supermarket chain Ito-Yokado Co. also said it has a fair amount of inventory, so the measure will not immediately affect its prices.

An official of Sojitz Corp., which deals with US beef and sells it to restaurants and other enterprises, said more restaurants may switch from US beef to pork or Australian beef.

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