business

Prices of food items rise from 4-13%

65 Comments

The prices of several food items went up on Wednesday, one year after the sales tax was increased to 8%.

Prices of items such as butter, cheese, yogurt, instant coffee, chocolate, ketchup and vegetable oil rose from between 4% to 13%.

Food makers and importers say they are being hit hard by the weak yen which has sent the prices of imported ingredients soaring.

Meanwhile, Tokyo Disneyland and Disney Sea hiked the price of a one-day passport for adults by 500 yen to 6,900 yen.

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65 Comments
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Thank you Abenomics. One year ago there was less on the dinner table thanks to the tax hike. Now even less due to the raising prices but no raise in pay.

27 ( +31 / -4 )

It sure is nice being relatively poorer.

20 ( +20 / -0 )

So, this is Abe's 'virtuous cycle of spending and investment'? Bwahahaha!

21 ( +23 / -2 )

In addition to prices in the check aisle going up, producers have also reduced quantities of many packaged items to the point where there are absurdly miniscule quantities in a single package.

Japanese consumers have always been given the short end of the stick, now it is even worse.

31 ( +34 / -3 )

Abenomics is dead. Long live Abenomics!

9 ( +10 / -1 )

Good job for the powers that be that Japanese never complain. They can do whatever they want to them and there's never a whimper. Abenomics is for the rich and the elite.

20 ( +22 / -2 )

That's why I nearly always shop COSTCO- more bang for your buck.

9 ( +14 / -5 )

Prices of items such as butter, cheese, yogurt, instant coffee, chocolate, ketchup and vegetable oil rose from between 4% to 13%.

This makes no sense.

-7 ( +2 / -9 )

Last year's price hikes were bad. Not enough money. Now, prices are going up again. Pay flat, prices up.

12 ( +12 / -0 )

Abenomics is taking a bite out of people's wallets.

14 ( +14 / -0 )

Cost of food goes up. Salaries stay the same. Meanwhile the rich get richer. This is what you get from an ultra right wing government, Much more of this and Japan will lose its place as safest country in the world.

18 ( +22 / -4 )

I can understand a weak yen making imported goods more expensive (though a strong yen never seems to do much to make things cheaper), but what makes Disneyland more expensive? Is that price rise being passed on to employees in the form of a pay rise? And if not, why not?

17 ( +18 / -1 )

Food and essentials shouldn't be taxed in the first place...

18 ( +20 / -2 )

I and my fellow workers (70,000) never got a pay rise this year and my wife, who works for the biggest airline in Japan, got a 0.048% pay rise.

The numbers of a virtuous cycle, just do not add up, no matter how gaga you are. Stagnant wages and increased prices equal lower consumer spending by any sane person's calculation.

15 ( +17 / -2 )

The suicide rate of Japan is dangerously high. One of the reasons why most of us commit suicide is due to the stress induced from work. What's worse is fhat it's almost impossible to get a raise. It's like this effin government's failed Abenomics is making us work to our deathbeds. No wonder people jump into the tracks every day.

10 ( +14 / -4 )

No increase in my national university part-time instructor salary. It's a good thing my family is used to being poor. But I'll need to pay more attention. Ordered things from the Itoyokado Net Super to save on the bus fare. As I was checking out, there was a pop up of items I've irdered in the past asking me if I'd forgotten anything? Without really looking I added a carton of real cream and then was surprised to receive a (very cute) miniature item with less than half the previous amount for about the same price. Ouch!

12 ( +13 / -1 )

bah bah bah, its time we get some cream because we have received nothing but cr*p, prices go up, meanwhile salaries stay same.

How about increasing prices on tobacco instead.

5 ( +7 / -2 )

Thanks Abe...

6 ( +7 / -1 )

Abe and his friends need more money ...

... that's another way how to get it.

What will his next arrow look like?

7 ( +7 / -0 )

The errant 5th arrow of Abenomics.

4 ( +5 / -1 )

If you eat simpler (i.e., healthier) you need not worry too much. When I look in the wife's shopping cart and hear her complain I say "put back all the snacks that make up 10-15% of the cost." Also, avoiding the rip off 130 yen canned coffee now, and tiny kit kat candy bars for 120 yen.

0 ( +5 / -5 )

@ Gary Raynor

I wonder how many of your 70,000 Japanese colleagues voted for Abe? Or worse yet, didn't even vote at all? Abe was very clear about what he wanted to achieve, he was voted in on that platform, and then people are shocked and dismayed when he follows through.

4 ( +6 / -2 )

Did anyone really expect anything different?

7 ( +7 / -0 )

Don't worry guys, once the genius investors and CEOs figure out what to do with extra billions in their bank account, you and me are going to get some of the sprinkled money they're so willing to spend. They're just not willing to spend it right now, same reason people like you and me aren't willing to buy spend, because of that, CEOs aren't willing to spend, because we aren't willing to spend, so corporations aren't willing to spend, because the market isn't willing to spend, and so on. Abenomics, the art of going in circles, realizing it and ignoring it.

5 ( +5 / -0 )

Impose heavy taxes on non-essentials like fags and booze and introduce zero consumption tax on food, like in the UK. They could go a step further and add extra tax on to junk food like in Denmark. That would raise extra money without making essential food too expensive for the lower income groups to eat.

4 ( +9 / -5 )

Abe's arrows go straight to the heart - and kill it...

7 ( +8 / -1 )

It"s bad for consumers. Everything passed down to buyers.

4 ( +6 / -2 )

They should not tax food. And when I say food, I mean food, not candy and not potato chips.

7 ( +9 / -2 )

These price increases give me one more reason to eat less and loose weight!

0 ( +2 / -2 )

Its typical that like everywhere the rich will stay rich and middle class will get wiped out and become the poor. Taxing cigarettes and non essential items is good in theory but people have their vices and they are still going to buy it. It doesn't help, they need to restructure their tax systems so that high income earners stop avoiding tax. How about Japanese politicians take pay cuts? Can you see that happening hahaha zettai muri

2 ( +3 / -1 )

The bottom line is that Japan's economic problems boil down to one statistic: a total population of 127 million and a working population of 65 million, with the majority of the non-working population being elderly.

Increasing the tax rate isn't going to help in the long or medium term, in fact it'll just discourage young people, who are struggling financially, from having kids.

Increasing the tax rate hasn't even helped in the short-term, Japanese national debt continued to rise at much the same rate and all Abe's doing is borrowing from Peter to pay Paul.

-2 ( +7 / -9 )

Prices of items such as butter... rose from between 4% to 13%.

What, we can buy butter again?

When I was shopping at weekend, all customers were rationed to one 100g pack per family, and it was much more than 13% more than it used to cost before our Great Leader bestowed his fiscal wisdom upon us.

10 ( +12 / -2 )

Why have dairy products - devoid of imported ingredients - gone up ?

5 ( +5 / -0 )

Not just the sales tax. also the dramtically weaker yen. given this why hasn't inflation gone up?

1 ( +2 / -1 )

Why have dairy products - devoid of imported ingredients - gone up ?

Imported feed.

8 ( +9 / -1 )

Have you heard the reason why they cannot figure out why to not to not tax food and other ordinary essentials?

Some farmer ... of which we know they have the most power, as the sun proves each and every morning, as it wakes up earlier and earlier...and by summer it will be light out at 3:30 am..said the following.

I give my grandson a cream puff (Shucream) for breakfast every day. It is his breakfast food. So it should not be taxed! Well.....that is so stupid. It is cake. It should be taxed as should all othe non-essential foods...junk foods.

Vat tax for luxuray items kids. No tax on real food, meds, diapers, school uniforms, school books, hospital visits etc.

-1 ( +2 / -3 )

I give my grandson a cream puff (Shucream) for breakfast every day. It is his breakfast food. So it should not be taxed!

Tax the sugary, fatty cream puff and maybe breakfast will morph into something healthier and tax-free (or tax-reduced). Big benefit for the grandson, too, getting a proper breakfast instead of junk....

3 ( +6 / -3 )

its odd they dont seem to lower the prices when the yen is strong....

7 ( +9 / -2 )

I don't really get how this stuff is supposed to work. Devalue the yen, increase the consumption tax. Prices rise, consumers stop buying. Companies find their profit margin shrinking with higher production costs and fewer sales. They raise prices more. Consumers buy even less. The government then tells these pinched companies to raise salaries even though they're making less money. A few grudgingly fork over 1% to their employees. That lowers profits still more. So prices rise again or else companies just accept making smaller profits. Oh, and as an employee, you're still expected to work unpaid overtime and on your days off and holidays and all that other good stuff that comes with being a salaryperson in Japan, which is kind of like being a serf in Europe in the Middle Ages only now you have a smart phone. This is all fine if you're some top exec, child and grandchild of a top exec and buddy-buddy with the LDP. For everyone else, it's a disaster where Abe seems to think if he artificially changes effect somehow it will fix cause.

9 ( +9 / -0 )

The prices of several food items went up on Wednesday, one year after the sales tax was increased to 8%.

... so the sales tax has nothing to do with this story.

Prices of items such as butter, cheese, yogurt, instant coffee, chocolate, ketchup and vegetable oil rose from between 4% to 13%.

The weak yen is one angle here, but with respect to dairy products, it's Japan's high barriers to imports that is to blame.

Global dairy prices have fallen a lot recently, as illustrated by global dairy trade auction results: http://www.globaldairytrade.info/en/product-results/

And yet prices of related dairy products go up in Japan. The Japanese government should get over it, quit with the central planning, drop the barriers to dairy product imports, and the glut of global dairy products could flow into Japan unobstructed. Then you'd think that prices might go down, even considering the weaker yen.

Sure, some will say the domestic dairy product producers will have a hard time. But the alternative is ALL consumers having a hard time instead. Which is in the true national interest?

introduce zero consumption tax on food, like in the UK.

There's another approach, which is to just keep it simple like in New Zealand. It works fine there. The main beneficiaries of arbitrary tax rates on different products are the politicians in their quest for votes.

If Japan did something wrong, it's that it didn't adjust income taxes to account for the extra burden for those on low incomes.

One has to remember that the upper middle class and rich buy a lot of stuff that lower income people consume too. There's no need to give them all the same tax break. To help the lower income folks, it's better to adjust the income taxes, rather than give the rich a sales tax break too.

8 ( +8 / -0 )

Welcome to my world living tax 8% eveyrhting hike! How is feel it?

-1 ( +1 / -2 )

I don't really get how this stuff is supposed to work.

Few do!

I read a book by Abe's advisor, Etsuro Honda, about Abenomics and how it is supposed to work, but there were a few jumps in logic that went over my head (or there was just no logic to it). It's a very theory about lower real interest rates leading to professional investors doing this and that... etc.

Buut if your average Suzuki in the street has no clue about this theory, and only sees his grocery bill going up due to a weaker yen, that's obviously going to have some serious negative impact in an economy where consumption is 60% of GDP.

Over time, a weaker yen probably will help improve Japan's competitiveness. But I for one think the Abenomics 3rd arrow should have been the centerpiece of the plan, not Kuroda's monetary easing.

5 ( +5 / -0 )

I read a book by Abe's advisor, Etsuro Honda, about Abenomics and how it is supposed to work, but there were a few jumps in logic that went over my head (or there was just no logic to it). It's a very theory about lower real interest rates leading to professional investors doing this and that... etc.

Ah! Thanks for a thoughtful answer. That's interesting stuff. So it has a basis in something that really is cause-and-effect at least. Seeing the effects so far it's seemed exactly the reverse.

3 ( +3 / -0 )

Prices of items such as butter, cheese, yogurt, instant coffee, chocolate, ketchup and vegetable oil rose from between 4% to 13%.

I said in a post yesterday that Abe and Kuroda had simply created a perfect storm for the J-economy, and this is more proof. Volatile food prices, which do not factor into the government's calculation of inflation, are rising rapidly, due to the weaker yen. But, since things that are included in the calculation, like oil, have gone down, the inflation rate is no where near the 2% target that Kuroda insists on chasing. Plus, the economy, especially domestic consumption, is flat, at best. So, to both stimulate the economy, as well as try to induce inflation, the Dynamic Duo are going to flood the market with even more yen, which, of course, will just drive the yen down further, and push up prices like these more. And on, and on, and on. It's just like in the movie, where the Andrea Gail is in the calm of the eye of the storm, and Mark Wahlberg says to George Clooney that they are going to make it out, and George says something to the extent of "Not so fast, we still have to go through the other side of the storm". This is where the J-economy is.

5 ( +6 / -1 )

Its always scary when prices rise and soon those high prices become the new norm, but your wage remains the same and all of the sudden you find yourself even farther from the poverty line that seemed so attainable just yesterday.

So close, yet so far away.

4 ( +5 / -1 )

Vat tax for luxuray items kids. No tax on real food, meds, diapers, school uniforms, school books, hospital visits etc.

American tried the "luxury tax" several years ago. Things like yachts, jets, and other high-priced items were taxed. The result is that many of these industries closed, tens of thousands lost their jobs, and the government ended up collecting less revenue than it did before. The tax was repealed, but the industries have still not fully recovered from the damage. The rich account for about 35% of domestic consumption, increases in their tax rate have a large impact on the sales of domestic companies. Taxing the rich sounds good in theory, but it doesn't work in practice. Unlike poorer people, the rich can simply leave and go somewhere else where their money is more appreciated. I receive mail from Singapore from time to time, yes, Singapore and other countries are actively trying to get businesses to move to their countries. Singapore offers a very simple 15% flat tax rate, which everyone pays, and very little regulation. No wonder that Singapore went from being the world's poorest country to one of the world's richest in only 2 generations.

The increase in prices was one of the goals of Abe's so-called fiscal policy, which was supposed to be offset by increases in business due to deregulation. This deregulation was supposed to help drive increases in salaries and investments. Unfortunately, no deregulation has yet occurred, and it looks increasingly less likely that it ever will. Japanese businesses will not heed Abe's calls to raise wages or invest in the economy until he releases the "third arrow" as promised. If Abe doesn't, these companies can always go to Singapore, Kuala Lumpur, Manila, or Ho Chi Minh City, which are already rolling out red carpets before them.

-1 ( +5 / -6 )

I'm trying to understand the timing here.

Naoto Kan (DPJ) pushed through the tax rise in 2012, Abe delayed the one after in November last year.

Some details please?

0 ( +1 / -1 )

jerseyboyApr. 02, 2015 - 12:05PM JST

Volatile food prices, which do not factor into the government's calculation of inflation, are rising rapidly, due to the weaker yen. But, since things that are included in the calculation, like oil, have gone down, the inflation rate is no where near the 2% target that Kuroda insists on chasing

Just wait until September 2015. Kuroda and the government will change the goal posts and include food prices in the inflation figures and voila, the BOJ will have reached its 2% inflation rate.

The really scary part is what happens after they reach the 2% inflation and the BOJ is pressurized into stopping its QE. Of course it won't be able to because there was before Abe and there will be again, no one to buy the government bonds. Most posters missed it, Globalwatcher didn't, but before the BOJ started buying government bonds, the MOF couldn't find any private institute, no matter how much pressure it applied, to buy the government bonds on offer.

The BOJ won't be able to stop its QE and the policy will be seen for it really is, currency manipulation and moneterizing the national debt.

Noriko Hama, professor/economist, did an excellent video on this. If you half an hour to spare, google it.

3 ( +5 / -2 )

Nowadays, everyone is shopping like a Japanese Obasan! If you dedicate more time to shopping around, you can really stretch out your yen.

Important strategies:

-Generic, in-house, store brand staples (sauces, coffees, pastas, etc.) instead of label brand foods.

-I've noticed that fruits and vegetables in both supermarkets and local food shops near my home considerably rise in price once it's Saturday and Sunday (when a lot of people are "forced" to do their shopping or shop for special ingredients for their weekend meals.) Therefore, weekdays are often cheaper than weekends!

-"Time Savings" purchases: 30%-plus off for soon-to-expire meats, fish and other perishables. (Some things like sushi naturally need to be eaten that very day, while others have label dates which allow a few days before they "go bad." Even then, most things are fresh, it's just that newer products have arrived to compete with shelf space.

-100 (108?) yen shops and other discount "supas" like "My basket" for non-perishables like sauces, curry rue, dressings and the like. Often the products are the same brands as in other stores, but much cheaper!

-NOT buying products that have markedly increased in price. You're not the only one noticing the sticker shock: no or low demand for a suddenly more expensive product WILL result in adjustments (or generics moving in to expand market share at the expense of these now-pricier brands.)

-Think "Uniqlo"-style when shopping for food!: 15 years ago, everyone had to buy pricier brands for rather generic things like t-shirts or socks. Now, everyone buys these things in generic shops like Uniqlo or G.U. so they have money left for labelled outer wear. Do the same with food shopping (i.e. saving your costly or quality purchases for those foods that really matter to the dish you're preparing) and the generic "back-up" foods also in the mix will add up to save you a bunch!

In every case, one is sacrificing on time, quality or convenience. But one must do what one must in order to make ends meet!

3 ( +3 / -0 )

Part 2 of last year's April Fool joke. Of course, these price increases are the result of the devaluation of the yen, not the consumption tax increase. But both are taking a bite out of everyone's backside. Expect a double dip.

5 ( +6 / -1 )

It was Noda (DPJ) who pushed through the sales tax hike, in agreement with Komeito and LDP, as I recall. Abe then let the first sales hike happen, but in a show of gross fiscal indiscipline opted to postpone the second hike, while not compensating for this with any cuts to out-of-control government spending.

But this isn't about the sales tax as much as it is about the yen. It was Abe's rise to lead the LDP and run in an election against the DPJ that precipitated the big fall in the yen. This is what is behind the ongoing price hikes in food and other stuff. The 3% sales tax hike wasn't much in comparison to the effect of the 20-30% fall in the value of the yen (so far).

2 ( +2 / -0 )

That's why I nearly always shop COSTCO- more bang for your buck.

That bang has turned to a mere pop. Less than 18 months ago a 3lb bag of almonds was about 1,200 yen; now, the price is nearing 2,000 yen. Their wholegrain bread was 599 yen, now 699 yen. The prices of their cheese and other dairy products have risen by over 50% in the last year. Of course, most of costco's products are imported and prices have risen in line with the weak yen. On top of that, you also have to consider the rip-off 4,320 yen yearly "membership" fee. People don't shop at costco for the reasonable prices any more; they shop for the availability of products not usually found in Japanese supermarkets.

8 ( +8 / -0 )

Good point zootmoney. But if we all have to pay up a little more, I still prefer the products & availability @ costco. Money goes pretty far too @ Don Quijote chains. Especially when you plan a bbq and shop for meat there.

2 ( +2 / -0 )

I'm still glad Costco is here. But you're right, prices have went up there too. The cheddar cheese is still a bargain at ¥1,078. Went to buy a garden hose the other week. Two top DIY shops had basically the same products and prices. Paid ¥3,500 for a cheapo with a roller on it. Brought it home, put it to use, and the head kept popping off from the water pressure. Took it back. Bought one at Costco, 25 more meters, self coiling and higher quality. ¥2,700.

As was stated above, those who voted for this central banker and those who didn't vote are ultimately responsible. Things will have to get much MUCH worse before the the sleepers wake up.

Those in the big cities will have a harder time. I was very close to buying a chunk of land(2,400sqm) for a GREAT price right next to a huge new subdivision and renting out small plots for families. However, the price was too good and it was bought before I could convince the wife. Ugh!

1 ( +2 / -1 )

Glad they mentioned the Disney Land increase at the end, as THAT may get the message home to some of the people still in a bubble about all this and who frequent the place. What's worse about this is that those products ALREADY went up when the tax did, and my local bakery, for example, went from 250 yen for a certain loaf of bread to 300 in one day because of butter, milk, and cheese increases through the yen (import increase) drop and taxes. Now they will go up AGAIN for the same excuse, and probably product size will shrink again to boot!

Thank you, Abenomics! Hope they STILL aren't expecting consumer spending to rise, because so far all we've seen is a tax increase, massive spending stimulus for companies and banks, an increase in government mishandling of allocation, reduction in pension amounts, increase in health care costs, and these increases in food and more! NONE of the salary increases, save enough to buy half a case of beer per month if you work at a major corporation (that gets heaps from the decrease in corp. tax among other things). And now this. How can Abe seriously say his plan is still working, unless his plan from the beginning was to fail?

7 ( +8 / -1 )

the main reason for high food prices in Japan isnt the tax hike its the crazy high tariffs on imported ingrediants. bring on the TPP. itll bring much needed competition to the food industry in Japan. what people fail to understand is your high grocery prices are going to subsidies uncompetitive Japanese farmers producers. less than 3% of the population, 1% of the economy is holding the other 97% / 99% to ransom

3 ( +5 / -2 )

Went through the above and clicked on a whole bunch of "good" comments. Too bad Abe and his LDP cronies can't see this ... but then, even if they do, they could care less. That 2% inflation target must be met no matter how high the price increase percentages are ... That, my friends, is Abenomics ...

3 ( +3 / -0 )

I see Bulgaria yogurt is pictured here as one of the food items which have increased in price. Fortunately the yogurt I buy is still just 128 yen for 400 grams.

But I have noticed the price of other items going up. Grrrrr.....

2 ( +2 / -0 )

More money spent on non-discretionary items. Less money for the rest of the economy. It wouldn't be so bad if prices weren't already pushed up high by middlemen/inefficient distribution. That's why "only 3%" up has hurt Japan much worse than increases in the VAT in Europe.

0 ( +0 / -0 )

What is PM Abe thinking?

"Let me see . . . How much more can I squeeze these poor dumb consumers till they squeal?"

0 ( +1 / -1 )

Some food prices up 4-13%. Sales tax up by 3% and another 2% soon. My salary up by 1-2%. Hmm... Hey Abe and co. stop twisting my nipples!

1 ( +1 / -0 )

@bruinfan

That's why "only 3%" up has hurt Japan much worse than increases in the VAT in Europe.

A bit glib.

Some of us remember when VAT in Britain was raised from 8 percent to 15 percent (June 1979). This was right after Thatcher was elected. There was a vicious 2-year recession, with mass unemployment, civil unrest, and industrial decline. Cities in the Midlands and North were especially badly hit, and it still shows.

You can be sure that the sudden increase in VAT did not go down well with a lot of people.

2 ( +2 / -0 )

Reports of wage growth in 2014 were recently revised down to ............zero That's right, as we pay more and more to live, we get less and less!

It was the case that I could make a living in Japan but now the majority of my income comes from outside foreign business dealings

If my family weren't in Japan I'd be out of here.....fast !

2 ( +2 / -0 )

Amen to Fxgai. Half the time I'm at the shop, I can't find butter for ready money. Costco is a blessing. The J-government should butt out of the agricultural market and lower the dairy tariffs.

2 ( +2 / -0 )

@wipeout

Thanks for the information. I am not glib (although a few posters are). What do you make of this one?

http://www.bloomberg.com/news/articles/2014-11-19/why-japan-s-8-tax-mauled-economy-as-europe-tolerates-20-

0 ( +0 / -0 )

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