Japan enforces emergency food supply laws amid cost surges

Japanese F&B companies will hike prices on over 4,000 products today to offset cost surges throughout supply chains, including rising energy bills, labor expenditures, and raw material prices. The government is responding to the situation by passing new laws compelling farmers to increase the production of staple crops like rice. 

Teikoku Databank, a credit research company based in Tokyo, recently found from a survey of 195 F&B companies that 4,225 products will have price hikes — the biggest single price rise in 18 months. 

In response, the government has mandated that 12 food products — rice, meat, soybeans, wheat, sugar, eggs, and dairy products — be classified as crucial foods. Policymakers will help secure access to fertilizers and other essential resources to bolster yields. 

If the supply of any of these ingredients drops by 20% or more, the government can order national businesses to draw up remediation plans and fill quotas, either by boosting domestic yields or international imports. Failure to act would be liable to punishment. 

Yesterday, the country’s agricultural ministry announced that rice collected by major Japanese purchasers was down 254,000 tons compared to last year. Distribution bottlenecks result from a number of factors, including geopolitical impacts, summer heat, and increased demand from tourism. 

Teikoku Databank forecasts price hikes for around 20,000 products this year, up from 12,520 last year. Additionally, of the 195 companies surveyed by the group, all leading beer producers will raise their prices for the first time in 18 months.