A customer is served in an izakaya in Tokyo. Photo: REUTERS file
business

Suntory CEO says 20% of restaurants may fail as coronavirus slams Japan's dining scene

21 Comments
By Ritsuko Ando

Takeshi Niinami, the head of Japanese drinks and food group Suntory Holdings and a government adviser, predicted on Friday that more than 20% of bars and restaurants could fail due to the coronavirus pandemic.

Japan's vibrant dining scene, from tapas style izakaya pubs and restaurants to Tokyo's high-end eateries boasting the largest number of Michelin stars of any city, mostly shut down in April as the government declared a state of emergency.

Even with the emergency status lifted, many restaurants are reopening with caution and with limiting seating and opening hours as customers remain wary of dining out. Niinami said he feared the country's eating-out culture could be hurt for good.

"If you ask me how much will return, I'd say roughly, around 80% will be back," Niinami, an economic adviser to Prime Minister Shinzo Abe's government, told Reuters in an interview.

Niinami said that while the government's $1.1 trillion extra spending package approved last month was substantial, the government needed to be ready to provide more if a second wave of infections were to hit.

"I think it would be good to have 80% of them return, although of course I really want 100% back," he said. "Given the current coronavirus situation, what I'd like to see is for them to make it through the next two to three years until we can allow for more noisy, intimate get-togethers."

Privately-owned Suntory is dependent on the survival of Japan's dining industry, worth 25 trillion yen by some estimates, as an outlet for its drinks including Yamazaki whisky and Laphroaig single malt Scotch as well as Premium Malt's beer.

The company is backing a new dining app called Saki-meshi, meaning meal in the future. It allows consumers to support their favorite restaurants by paying for meals up to 180 days in advance, to provide restaurants with much needed cash to survive until business returns.

Niinami added his weight to calls for easier access to coronavirus tests, to allow people to more confidently resume business activity.

The Japanese government has been widely criticized at home for its lack of testing, although the country appears so far to have escaped an explosive outbreak with around 910 deaths so far.

© Thomson Reuters 2020.

©2020 GPlusMedia Inc.

21 Comments
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The Japanese government has been widely criticized at home for its lack of testing, although the country appears so far to have escaped an explosive outbreak with around 910 deaths so far.

Unfortunately the criticism wasn't from abroad hence no effect.

4 ( +9 / -5 )

I really hope that the situation for restaurants and Izakayas will come back to normal soon.

Izakayas are the heart of Japan.

Best places to meet and make new friends, best places to relax after a hard working day, and best places to enjoy best traditional japanese food in a traditional enviroment.

But I am sure that sooner or later the guests will come back, because the japanese people love their Izakayas. There is no better place to enjoy Premium Malts and Yamazaki Whiskey than in a traditional japanese Izakaya or Bar!

Besides that, Suntory Whiskey is very famous all over the world. And even the situation is very strange now everywhere, Suntory Whiskey will be always available and enjoyed by Whiskey Lovers all over the world.

Kanpei!

-4 ( +7 / -11 )

The chain type places I have been in the last couple days are at full capacity already.

some of the smaller places might not have survived long enough to now reopen. but anything that can open and has trained staff to work still will be fine from now.

-2 ( +6 / -8 )

Let's make a few things clear.

Japan would have lost between 5 and 10 % of bars and restaurant anyway because of the rise of consumption tax, decrease of population and subsequently there were to many bars/restaurants.

Under the current circumstances 30 to 40 % is a closer estimate. Because the people needing the money are not getting it on time.

2nd, great that government TALKS about so much money to be distributed but I have not seen any money yet , not personally nor for my company, only the bills keep coming, right on time.  And I am sure Dentsu got paid with priority as did the 4 manufacturers of the Abe Masks.

As an entrepreneur, I am used to and should be able to take of myself, but if they say they going to give us money, then either do it, or shut up.

3rd, most of the Suntory whiskies, are crap.  Some are excellent. Some.  Most are a mixture of cheap alcohol and caramel. Suntory however is one of the companies that has realised early on their salvation lies outside of Japan and so has been constantly buying bourbon and Scotch brands. Several good ones. Good for them.

I agree, Izakaya's are great, but if we can not rub elbows with colleagues, or smoke a nice cigar, I have no reason to go.  Food is mostly mediocre and the draft beer the same everywhere.  But still better than 90 % of those " craft " beers made by people with no clue how to make beer.

10 ( +15 / -5 )

What percentage fail on an average year? It must be at least 10%. And with the tax increase, it would've been higher this year anyway.

5 ( +5 / -0 )

I've heard numbers ranging from 15% to 40% restauranty failures expected in other countries. So 20% is as good a guess as any.

3 ( +3 / -0 )

No tests, no feeling of safety and comfort... no thanks, will go for take out.

3 ( +5 / -2 )

I think 20 percent should fail, as 30 percent are horrible restaurants and should have never opened in the first place.

2 ( +4 / -2 )

Considering the loss of tourists, I would say the number will be higher. A lot of these places may have opened up recently with the government's encouragement of tourism and the Olympics and that demand has now evaporated. In addition, Japan is taking a hard line on foreigners traveling to Japan which will further give it a negative image as a tourist or work destination. The final nail in the coffin is that domestic demand to eat out will continue to weaken with the 10% consumption tax and the aging of the population who have to live on 100,000 yen or less per month. I can only afford to eat out for lunches with my family after my son entered university and the tuition eats up discretionary spending.

10 ( +10 / -0 )

No tests, no feeling of safety and comfort... no thanks, will go for take out.

To be effective for that feeling of safety and comfort one would need to have a test every day.

A test today tells you that you are free of the virus today only.

It says nothing about tomorrow, the day after and so on.

I heard one economist say that the US needs to budget and prepare to test every citizen every 5 days until an effective vaccine is developed..

In the US the price tag is about 500 billion dollars to bring you that nice feeling of safety and comfort

Now, Mu-da, how much are you prepared to chip in?

gary

2 ( +6 / -4 )

Could fail? Pure speculation and most likely wrong.

0 ( +2 / -2 )

@garymalmgren

100% agree.

I said that before too!

The test is just for the moment.

If your test is negative now, after 5 minutes you can be infected by someone you met in the hospital, the doctor, the nurse, somebody on the street, in the elevator, on the stairs, in the train..

The test that you just took 5 minutes ago means nothing!

0 ( +3 / -3 )

As of June, 2020: Small companies with fewer than 10 employees made up about half of the bankruptcy cases.

2 ( +2 / -0 )

I would go to more restaurants and Izakaya if they were smoke free.

6 ( +6 / -0 )

Until we get a vaccine, it will be a gamble to have a sit-down meal at a restaurant. Providing options for take out and delivery will separate those that have built a customer base by providing good food at a fair value. Playing on the public's sympathy to risk patronizing sit-down places against the loss of income for restaurants seems unfair. Expecting "the Government" to bail out all businesses that face extreme adversity sounds good until the bill comes due to reimburse government bailouts. Loyal customers can directly bail out the businesses they enjoy by patronizing services that adapt to safe measures.

0 ( +2 / -2 )

Yes there will be some very sad losses. Yes there will be an adjustment of people's habits for a while. But there will be a treatment and vaccine found at some point then things will quickly return to some sort of normal. The important thing is to find the cure and vaccine. I feel extremely sorry for anyone whose business is being wrecked by something totally out if their control, a real tragedy.

0 ( +1 / -1 )

All those who say there will be a vaccine and things like that simply do not understand that there has never ever been a vaccine for any coronavidae.

The probability of a vaccine is low, a treatment is more probable, but still there is no confirmation on anything like that.

What science actually says is that, unless you are over 65, your chances of SARS-CoV-2 doing you anything more that causing you a cold are the same as any other Influenza Like Illness.

And even in cases where you are vulnerable, your chances for dying of COVID-19 are still very low, around 20%~1% depending on many factors.

I really do feel bad for people who live in fear for their lives because of COVID-19. But it isn't as surprising, since the media and governments have been overinflating what is already a global pandemic and causing mental health issues like anxiety and depression on top of this.

Let me be very clear. There is no real end-game in this, there is no insurance that there will ever be a vaccine or treatment, the virus will not go away. You just keep wasting your time in this world in fear.

People die. We will all die. Every single person will die. What is important isn't to survive for the sake of survival, is to live your life to the fullest, if you don't you are wasting time that will never come back.

2 ( +4 / -2 )

@drlucifer

*The Japanese government has been widely criticized at home for its lack of testing, although the country appears so far to have escaped an explosive outbreak with around 910 deaths so far.*

Unfortunately the criticism wasn't from abroad hence no effect.

Except it WAS criticised abroad:

- https://www.scmp.com/week-asia/health-environment/article/3077328/coronavirus-german-embassy-criticises-japans-case

https://thediplomat.com/2020/03/japans-limited-response-to-the-covid-19-pandemic/
1 ( +1 / -0 )

Several Japanese firms are waiting to roll out tests to get a big share of the viral pie that is worth big yen.

Basically people are being blocked

by the Japanese government from knowing whether they are infected, not infected or have been infected.

There are plenty of tests available (overseas) but no kickbacks to be had so ‘ignorance is bliss’ until miraculously in-country produced tests become available....

1 ( +2 / -1 )

It's sad because the places that have gone out of business are mostly the smaller ones that serve better quality stuff than the chains, often for way better value for money too

2 ( +2 / -0 )

That's a lowball estimate. I expect it would range higher than 50% of dining industry going out of business, as the prospect of no Olympics is being a reality soon.

0 ( +0 / -0 )

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