Archive for the ‘Products’ Category

Tobacco farmers lost but not forgotten in tax rumble

Monday, January 2nd, 2012

Smoke 'em if you got 'em: JT HQ in Toranomon, Tokyo

As every smoker in Japan knows, the cigarette tax was raised in the fall of 2010. With ¥3.5 added to each cigarette, it means a pack suddenly cost at least ¥70 more, and as a result sales have dropped by about 20 percent. So-called sin taxes are double-barrelled: They have a behavior modification purpose of discouraging users from over-indulging, and they’re an easy political sell since the consumers (and maker/providers) usually aren’t considered a sympathetic or powerful constituency by the general public. Consequently, the government is thinking of adding another ¥2 per cigarette tax levy to help pay for reconstruction.

The suggestion has been tabled for the time being, though it will likely be revived. The main reason for the postponement isn’t so much Japan Tobacco, which has a monopoly on tobacco sales in Japan, but rather the farmers who supply JT. There are approximately 10,000 households that make a living from growing tobacco, and about 40 percent have said that they plan to quit since they see no future in the crop. The presumed reason is the tax and the trend for quitting, but many farmers say they are getting out of tobacco because JT asked them to. Since JT is obliged to buy all their product, these farmers no longer have a guaranteed future, and with the Trans-Pacific Partnership possibly looming on the horizon, there’s even less of an incentive to stick it out.

Tobacco, like salt and rice, used to be a government monopoly. That changed in 1985 when the monopolies were abolished and Japan Tobacco was established. Despite the change in nomenclature, JT pretty much continued to operate as a monopoly, since it had to buy all the tobacco produced and controlled all sales of cigarettes. JT determined the price of tobacco before each growing season, meaning there was never a market for the crop. This worked fine while sales were strong, but after they peaked in the mid-90s revenues steadily decreased. Starting in 2004, JT solicited tobacco farmers to retire, and about 20 percent did exactly that. The amount of farmland dedicated to tobacco decreased by about 10 percent. Last year, JT asked more farmers to quit the game, and the decrease in farmland was 30 percent.

Continue reading about a possible hike in tobacco tax →

Convenience stores gear up for a brighter future

Thursday, December 29th, 2011

Ready when you are: 7-11 Premium prepared foods

The retail giant 7&i Holdings reported an 8 percent increase in sales for the first half of fiscal 2011 over the previous year. It was a new record and clearly driven by the company’s 7-11 convenience stores. They aren’t the only ones. The three other main CS chains — Family Mart, Lawson and Sunkus/Circle K — have also reported strong earnings, the result of what the Asahi Shimbun calls a “better opinion” of convenience stores in the wake of the March disaster.

Because there are so many convenience stores, they tend to be in closer proximity to people’s homes than larger retail operations, so during that anxious period when people did not want to stray too far from their homes and loved ones, CS became a sort of lifeline. As a result, demographics that previously didn’t patronize convenience stores, such as housewives and the elderly, came to rely on them more and more, and in the process also came to appreciate their distinctive merchandising schemes.

This success has given the industry a sense of purpose, and all four big CS chains have announced plans to open as many stores as possible over the next year or so. According to the Japan Franchise Association, as of March 2011 there were 45,769 convenience stores in Japan. The industry itself, according to the Asahi, believes that the “saturation point” for convenience stores in Japan is 50,000, though some analysts say that due to the rise in single-person households, which is exactly the sort of scenario that benefits CS, the market may be able to absorb even more.

7&i plans to open 1,350 stores in FY2012, while Family Mart, which over the past two years took over 800 former am/pm stores, plans to open another 800 brand new outlets. Lawson’s target for the same period is between 800 and 1,000, and the Sankus/Circle K juggernaut is aiming for 360.

Continue reading about the expansion of convenience store chains →

Solar soon to be heating up in Tokyo

Tuesday, November 29th, 2011

An old solar heating system collector

In the wake of the Fukushima nuclear accident solar energy as a concept has become more attractive to the average person, and the central government’s recent passage of a law to promote renewable energies should help make solar power more widespread. Of course, solar power isn’t perfect, but not so much for the reasons nuclear apologists put forth. For instance, those who say solar energy is basically inefficient point to the fact that the electricity generated by household solar collectors is the equivalent in power of only 10 percent of the energy collected. This is a specious argument since sunlight is, for the time being at least, free, so we’re talking 10 percent of something that is constant and endless and which, untapped, just vanishes into the ether. It’s not like wasting the potential energy derived from gas or oil, since those are by definition finite energy sources.

The problem with solar energy is mainly a political one. According to the renewable energy law, which was sent to the cabinet for approval a day before the earthquake of March 11, power companies are obliged to buy excess energy from home solar systems. Tokyo Electric Power Co. announced last spring that it would buy electricity derived from solar collectors from private homes at double its usual rate. What the utility didn’t say so openly was that this expense would be reflected in electricity bills for all TEPCO customers. One of the main selling points of home solar systems is that, over time, the sale of excess energy to power companies would pay for the systems themselves, which are very expensive, though prices are coming down. People of limited means, which probably describes most households these days, can’t enjoy such benefits because they can’t afford to install solar systems. In the end, they help pay for the systems of the more well-off through their electric bills, not to mention schemes like eco points, which use tax money. So while some may claim that the greater good — greater reliance on solar energy — is worth it, the policy as it’s now carried out is inherently unfair.

A more equitable idea at the household level is using sunlight for heating rather than generating electricity. Solar collectors for heating water have been commercially available for years, and in terms of efficiency — 40 percent — beat out solar collectors for electricity. Since 2009, the Tokyo metropolitan government has been planning to subsidize solar collectors for home heating purposes. They will give people up to ¥500,000 if they install a solar heater in a new house. Condominium builders will also receive some kind of incentive. Recently, Tokyo solicited solar heater manufacturers, 60 of whom applied for approval. Fifty-one were selected whose products will be eligible for the subsidies.

It is the first time a local government has encouraged through subsidies the installation of solar heaters, which have never been so popular even though they are relatively inexpensive and easy to install. The hot water that is produced can not only be used for baths, showers and washing, but also for room heating if the home has a radiant heating system installed in the baseboards or the floors. Such systems, of course, can help households save on energy bills and do not produce extra carbon dioxide, which is the main benefit for Tokyo since local governments have been charged by the government with reducing their carbon output. More important, these savings are not at the expense of other households who do not have the system installed. Solar heating is self-contained, and therefore self-reliant.

Are consumers being short-changed by the yen’s appreciation?

Thursday, October 20th, 2011

"Endaka" sale: Limited time only?

An ongoing matter of concern in the Japanese financial pages is the continued appreciation of the yen against almost every other currency. According to the overriding narrative attendant to this concern, Japanese exporters “enjoyed” a lower yen (en-yasu) until the middle of 2007, meaning that because the yen was valued low in relation to the currencies in the countries where these companies’ goods were sold, they made more money. That changed, and especially after the financial crisis of 2008, the yen shot up and continued to rise over the next three years, even after Japan’s economy was pummeled by the earthquake and tsunami last March. The yen is now up about 25 percent over what it was four years ago.

This is generally considered a bad thing since Japan’s economy depends on exports, but a lot of economists are saying the situation isn’t as dire as the media has portrayed it. Major exporters like Toyota and Sony have the ear of the mass media, so their troubles tend to represent all of Japanese industry in the financial press, but exports account for less than 20 percent of Japan’s economy. These companies threaten to move operations overseas if the yen isn’t brought down, but they’ve already moved a huge portion of their manufacturing overseas. In addition, they buy parts and materials from countries where their yen goes much further.

The economists who point this out also explain that the high yen can be considered a good thing for consumers, who should expect to “enjoy” substantially lower prices for imported products and Japanese products that use foreign ingredients. That should go without saying, and we’ve been waiting to see these savings at our local retailers. We’re still waiting. When we ask why the high yen isn’t reflected in prices we get answers like this: Though the yen is appreciating, commodity prices are increasing; many countries are experiencing inflation; since all imports have to be shipped, prices depend on the price of oil. In the end, these answers sound like excuses, because except for some isolated retail areas (Amazon; one particular brand of imported camembert, pictured), almost nothing sold in Japan from overseas has become noticeably cheaper in the last three years.

Continue reading about the high yen not translating to savings →

Will K-cars save the domestic automotive industry?

Monday, September 26th, 2011

Mira, Mira in the lot...

Two weeks ago, on the same day that it didn’t cover the huge anti-nuclear power demonstration in Tokyo, NHK’s 7 o’clock news bulletin had a feature about Daihatsu’s new small car, the Mira e:s (pronounced “ease”). Initially, we saw the report as further proof of the public broadcaster’s retreat from its traditional aversion to anything smacking of commercial promotion; but in the days since then we’ve come to realize that the announcement was newsworthy as more than just a financial story.

The e:s is the latest model in the Mira K-car series. K-car, as in kei (light), are automobiles made specifically for the Japanese market. The name refers to the engine displacement, which is only 660 cubic centimeters. Consequently, the weight and size are smaller than standard automobiles, which is why many people believe them to be unsafe. Because K-cars are very small and have to be lightweight, they tend to crumple easily in accidents. But they are also low-priced and get high gasoline mileage. What makes the e:s noteworthy is its even lower price–¥795,000–and even higher gas mileage–30 kilometers per liter based on JCO8 mode testing methodology. That’s almost a 40 percent improvement in mileage over previous Mira models owing to e:s’s lighter body structure and smoother transmission function. As a result, Daihatsu is marketing it as the “third eco car” after the all-electric vehicle and the hybrid. For comparison, Toyota’s best-selling Prius hybrid gets 32. 6 km/l and Honda’s Fit hybrid 26km/l.

Daihatsu hopes to sell 10,000 e:s per month, which seems quite feasible since Daihatsu is already the number one maker of K-cars in Japan (but not K-trucks). The company unloaded 341,000 during the first eight months of the year, though one of the main reasons for the robust sales was the March 11 disaster. K-cars are particularly popular in rural areas, where automobiles are a necessity and many families own more than two. Because people use them every day and for every sort of task, economy is the main consideration. Not only do they use less fuel, but the excise/weight taxes and insurance are much cheaper (though they are subject to a special Light Motor Vehicle Tax), maintenance costs are lower and owners in rural areas usually aren’t required to offer proof of a parking space for K-cars at the time of registration. According to the Japan Mini Vehicles Association, 43 percent of the automobiles registered in the Tohoku region before the March 11 disaster were K-cars. In the prefectures that align along the Japan Sea, the portion of K-cars often tops 50 percent, and in Okinawa it’s 53 percent. Many automobiles were destroyed in the earthquake and tsunami, and the demand for used cars, used K-cars in particular, soared as a result. A friend of ours who lives in Osaka just sold her 10-year-old K-car to a broker for ¥50,000. Usually with a car that old the owner has to pay the broker to haul it away.

In fact, K-cars have kept Japan’s domestic automotive industry stable in the past year. After the end of the government’s eco point system, sales of regular cars dropped, but K-car sales have been steady all along. And since they use less parts they were less adversely affected by the supply shortage caused by the March 11 disaster. Even Toyota is coming out with a K-car. Japan’s number one automaker never entered the field mainly because it has a 51 percent controlling interest in Daihatsu. But the market is too good to pass up right now, and the future holds at least some promise. Women are more likely to buy K-cars, and unlike the current demographic of over-70 women, who don’t drive at all, boomer women all drive and will likely continue to do so well into old age. The sunnier outlook for Daihatsu is exemplified by the company’s ad campaign for e:s, which features Bruce Willis making fun of himself as a celebrity shill. Only a company with supreme confidence would dare draw attention to how they draw attention.

LEDs make it cheaper to blind family and friends

Tuesday, May 31st, 2011

Freedom of choice: Lots of LEDs at Yamada Denki

The government wants you to save energy this summer because of the mess they’ve made up in Fukushima. The request is for you to reduce your consumption of electricity by 15 percent. Just in time for this setsuden (electricity reduction) season, the price of LED lamps is coming down. When LEDs first appeared on the market in 2009 the average price of a bulb was ¥3,827, according to the Light Bulb Manufacturers Association. The average price as of March was ¥2,274. Moreover, discount stores like Aeon and Don Quijote sell the 60-watt types for about ¥1,650.

Of course, when you say “60-watt type” you have to qualify the designation, since a 60-watt type LED does not, in fact, use 60 watts. Neither does a fluorescent bulb with that designation, which is still used because consumers are conditioned to think of a bulb’s brightness in terms of wattage, since that’s how you measured relative brightness with incandescent bulbs: the more power, the brighter the illumination. The same goes for fluorescents and LEDs but the proportions are much different, making comparisons almost pointless. For instance, a 60-watt type LED uses about one-eighth the power that a 60-watt incandescent bulb uses, but the brightness in terms of lumens is about half. The light bulb industry would prefer that you choose a bulb based on lumens, since the “XX-watt-type” designation is basically meaningless in the LED age.

Continue reading about LED light bulbs →

More reasons to spend money on chocolate, as well as reasons not to

Monday, February 14th, 2011

It may be a bit late, but for the record 20 percent of all chocolate sales in Japan are connected to Valentine’s Day. Everyone who’s lived in Japan for any length of time knows the ritual: On Valentine’s Day, women give gifts of chocolate to the men in their lives, whether they love them or not, and then on March 14 — White Day, as it’s been dubbed — men are supposed to reciprocate. The custom of giri-choco, or chocolate that’s given to men as a kind of “obligation” (i.e., work superiors and colleagues) didn’t develop until the early ’90s. In fact, giving chocolate to one’s lover wasn’t widespread here until the ’70s. Though Valentine’s Day sort of took off after the war, there were no hard and fast rules. You just gave sweets to your boy/girlfriend or spouse, and not necessarily chocolate.

Will you be my...hey! Come back!

This year, chocolate makers have been especially hopeful about sales for two reasons. This is the first Valentine’s Day in three years that falls on a weekday, and manufacturers think women will be buying more giri-choco for their male co-workers, even though figures show that custom seems to be fading overall. In fact, most confectioners are predicting double-digit increases over last year’s sales. The second bright spot is that women seem to have expanded their circle of chocolate recipients. Now there’s something called tomo-choco, meaning chocolate that is given to friends, specifically other women. This development seems to be in response to the general feeling that men who receive giri-choco don’t necessarily want to receive it, so women basically exchange chocolate with other women. Taking this idea to its solipsistic end, there’s even something called gohobi-choco, which is chocolate, usually expensive chocolate, that you give to yourself. (Gohobi in this case means to “reward” yourself).

In any event, one chocolate maker, Glico, says that according to its research, the average young woman who gives chocolate on Valentine’s Day gives it to more than 10 persons. Another confectioner, Lotte, found in a survey of females ranging from junior high school students to 40-somethings that the average woman will spend ¥3,266 on chocolate during this Valentine’s Day season, which is a 16 percent increase over last year’s actual average sales.

There are reasons not to give chocolate, as well, the main one being that the prime ingredient, cocoa, is a notoriously exploitative crop. About 70 percent of the world’s cocoa comes from four African countries: Ivory Coast, Ghana, Nigeria and Cameroon. The bulk of this crop is cultivated and harvested with child labor, much of it unpaid. Japan imports more than 55,000 tons of cocoa a year, 69 percent of which is from Ghana, so there’s a good chance that if you buy chocolate made by the usual domestic companies it’s going to be the product of slave labor. Fair Trade labels aren’t always a guarantee in this situation since a lot of plantations in Africa that use slave labor have in the past managed to still get covered by fair trade agreements, and according to Amnesty International, only 0.5 percent of the retail price of a chocolate product makes it back to the grower anyway. But most of the fair trade chocolate sold in Japan is from Bolivia, which seems to have better labor conditions than Africa does. Top Valu, a discount brand sold at Aeon, Saty and Jusco supermarkets, offers Fair Trade chocolate, so that’s an option for gift-givers with consciences and tight budgets.

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