Posts Tagged ‘EPA’

European winemakers fret over competition from Chile

Monday, August 25th, 2014

The competition: Wines from Australia, Chile and France with retail prices below ¥1,000

The competition: Wines from Australia, Chile and France with retail prices below ¥1,000

During the first half of the year, sales of wine from Chile exceeded those of wines from Italy, thus making Chilean wine the second most popular imported wine in Japan, and apparently, Chile is now gaining rapidly on No. 1, France. The main reason is the Chile-Japan Economic Partnership Agreement signed in September 2007, after which the tariff on Chilean wine started to decrease gradually from the standard duty on foreign wines of either 15 percent of import price or ¥125 per liter. Right now the tariff rate for Chilean wines is 5.8 percent, and it will be zero in April 2019.

According to a Jiji Press report, the further the tariff drops, the more sales increase. More significantly, the amount of wine being imported has gone up. In 2007, when the EPA went into effect, Japan imported 10,517 kiloliters. But 2013, the volume was 36,435 kiloliters, which is an average annual growth rate of 20 percent. For the first half of this year alone, 17,349 kl entered Japan, and since the end of the year is the big season for wine, it’s clear that this year’s volume will exceed last year’s. And note that France exported 19,093 kl to Japan in the first six months of 2014.

Nevertheless, importers have told Jiji that the EPA isn’t as big an influence as it seems. One wine industry association said that Chile’s product is more suited to Japanese tastes, whatever that means. But the fact is that other wine-making countries and regions are paying close attention to the Japanese market and may be worried about Chile’s ascendance. For one thing, while sales of alcoholic beverages in general have been on the decline, the consumption of wine has been going up. At present, the average Japanese person consumes a little less than three bottles a year. Consequently, Japan signed another EPA with Australia in July. According to the terms of the agreement, the tariff on Australian wine will disappear in seven years, which is faster than the rate reduction with Chile.

So Europe is especially anxious to get its own EPA hammered out, since it’s losing ground to these New World winemakers. Wine and cheese are two of the main products under discussion.

It may already be too late. According to a report in the Hokkaido Shimbun, Hokkaido Prefecture’s most prominent convenient store chain, Seico Mart, has seen a 10 percent increase in the sale of Chilean wines over the past year, or one-fourth of the chain’s entire wine sales revenue. That’s even more than French wines. The newspaper narrows the appeal down better than Jiji, saying that Japanese people prefer the slightly sweeter flavor of Chilean wine. But the real reason is the price. The bestselling wine in the chain is a Chilean wine that goes for ¥480.

A common retail belief when it comes to selling wine to people who aren’t connoisseurs in Japan is that ¥1,000 tends to be the limit, and Chilean wine is consistently below that ceiling.

The Japan-Swiss EPA means nothing to cheese lovers

Sunday, May 23rd, 2010

A bit rich: Cheese Okoku in Kita Senju

A bit rich: Cheese Okoku in Kita Senju

A common topic of conversation among my foreign friends is cheese, more specifically, where one can buy it at justifiable prices. Cheese is notoriously expensive in Japan owing to a number of factors both cultural and bureaucratic. The agricultural ministry is very protective of Japanese dairy farmers and slaps a fairly high tariff on any milk-based products from abroad. The duty on cheese is about 30 percent, but that’s 30 percent of the total cost of importing the cheese, meaning 30 percent of not only the wholesale price, but also 30 percent of the transportation cost and the insurance. And soft cheeses, at least, have to be shipped by air, so costs mount even more, and by the time the cheese is in your local store it has passed through the grubby hands of middlemen and can cost three or four times what it cost in its home country. Theoretically, if you buy it in bulk or over the Internet you can save some money, but Japanese, I’m always told, don’t eat cheese that much. If that’s true, then why is Japan the second biggest cheese importer in the world?

It’s no secret that the big national food companies that deal in dairy foods like Meiji, Yuki-jirushi (Snow Brand) and Morinaga directly benefit from the cheese tariff and most likely lobbied to have it put in place. But the bulk of their sales in this realm is processed cheese (natural cheese imported for the purpose of making processed cheese is tariff-free), which Japanese consumers prefer. In fact, 90 percent of the so-called natural cheese sold in Japan is imported from abroad. This would seem to indicate that Japan produces very little non-processed cheese. If it’s true that Japanese consumers in general don’t like “real” cheese, meaning the harder, smellier kind, what exactly is there to protect?

The price of cheese from Switzerland should have at least come down a little bit because Japan concluded an Economic Partnership Agreement (EPA) with the country that went into effect last September. This means that Swiss can buy cars and electrical appliances from Japan without any import duties and Japanese can buy luxury watches and chocolate and Nestle’s instant coffee with the same benefits. Cheese, too, since it’s a major Swiss export, mainly emmenthal (the one with the holes) and gruyere. However, we have not noticed any appreciable change in the price of cheese from Switzerland in the past nine months. At the very least, the price should have come down in relation to the Swiss franc, which, like most currencies, has lost much of its value against the yen in the past year. I know there’s a lead time when it comes to price changes pegged to foreign currency fluctuations, but I’ve seen absolutely no change in the past few years in the cheese cases of my local stores.

Last week we bought a tiny block of Swiss emmenthal (¥480 for 100 grams) and an even tinier block of Swiss gruyere (¥1,100 for 100 grams) at Cheese Oukoku (Cheese Kingdom), a chain operation that you usually find in the basements of department stores. Their salespeople like to show off their knowledge of all things cheesy by advising customers on how to enjoy certain types, how it’s made, the aging process, etc., but when we asked one of them about the Swiss issue he professed to know nothing, and said he had never even heard of the EPA. What about the drop in the franc and the euro? we asked. Shouldn’t that make a difference?  “The price of cheese hasn’t gone down,” he said. That much we knew just by standing there and looking.

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