Japanese consumers to face more price increas...

Japanese consumers to face more price increases

Japanese consumers have seen food prices rise this year, as major food manufacturers have raised their prices.

Despite, further price increases are anticipated this year, and in 2008.

However, meat prices in the retail sector have been steady, regardless the depreciation of the Japanese yen in the last 12 months and record fuel and grain prices.

Pricing is a hot topic in Japan at present, as news on rising material costs and the weakening Japanese yen started to penetrate consumers’ sentiment. There have been several trade and media stories on global food trends, with suggestions to accept “reasonable” price restructuring by suppliers in order to ensure food safety, an active trading environment and consistent supply from overseas.

Yet, it is a challenging time for both trade and consumers, as employee income growth has been slow and consumer spending is described as “almost flat” in the recent economy report by the Japanese government. Several major retailers, including Aeon and Seven Eleven Japan, are maintaining their position so far to avoid increases in consumer prices.

Petrol prices in Japan hovered around 145 yen/litre ($1.35) in recent months, but reached 147 to 149 yen/litre since November, reflecting the recent price surge on the international market.

In contrast, meat prices have been unchanged in the last 12 month, despite the Japanese yen’s weakening position against both the A$ and US$. Average retail price of imported beef (chilled loin cuts) during September/October was 376 yen/kg ($3.4), down 0.6% compared to the same period last year (Japan’s Ministry of Agriculture, Forestry and Fisheries). The price this year reflects the US product return, fierce competition from other proteins, such as pork and chicken, as well as sluggish beef demand in the market.

Source: Meat and Livestock Australia (MLA)