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The Characteristics and Latest Trend
of the Food Market in Japan (2/2)

Contributed by: Mr. Taketoshi Arikawa (Chairman of FTA committee, JTBF)


(This article is a transcript of lecture given to the food industrialists of East Asian countries in AOTS seminar of March 12, 2008)


   INDEX

  1. The characteristics of the Food Market in Japan
    Transition of Market Size /  Transition of Market Size & Share by Food Categories /  Consumers' Price Index /  Self-sufficiency Rate of Food /  Population Problem /  EPA惻FTA /  Summary
  2. Recent Issues (Food Safety and Peace of Mind)
    Consumers' Concern on Food Safety /  Foreign Material Contaminants /  Labeling of Genetically Modified Organisms (GMO) /  Labeling Obligation of Allergenic Material /  Mad Cow Disease (BSE) /  Bird Influenza /  Positive List of Agricultural Chemicals /  Fraud Labeling /  Summary


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2. Recent Issues (Food Safety and Peace of Mind)

Consumers' Concern on Food Safety

The recent questionnaire survey about consumers' consciousness of food safety revealed a strong concern in terms of risks associated with residual chemicals in the food. Prion protein, which is said to be the cause of BSE, or genetically modified foods are also in the concerning list.

Let me overview how and when the afore-mentioned concerns came out. It relates to food-related incidents which have occurred since 2000. Food companies' counter measures will also be introduced.


Fig.2-01: National monitor report on food safetey (Dec. 2004)


Foreign Material Contaminants

First, let me introduce a food poisoning problem which was exposed in 2000. Foreign material contamination has been a typical quality problem of food products since long time ago in spite of manufacturers' efforts to eliminate it. On the side of consumers who found foreign material contaminants in the purchased products, however, reaction was no more than raising claims to the shop where they purchased from or directly to the fabricator. There was no case of publicizing the problem.

However, the problem of 2000, which was associated with one of big food (dairy) fabricator, invoked anger and disbelief of consumers as never seen before. Consumers who found the problem exposed the problem by, not limited to raising claims to the fabricator. but reporting to the public health center, or publicizing through internets or some by informing mass media, newspaper, magazine or TV. Mass media responded to it by reporting the subject days and nights, which expanded consumers' disbelief on the fabricator and food safety in general.

In coping with the change of consumers' reaction, food fabricators had to check production facilities and processes even harder. In addition, they started to implement a management system called Hazard Analysis Critical Control Point (HACCP), which was a hygienic management system of NASA as associated with space food production.


Fig.2-02: Consumers' Claim and HACCP


Labeling of Genetically Modified Organisms (GMO)

Let me refer to labeling obligation of Genetically Modified Organisms (GMO). The obligation started in April 2001 after defining the labeling requirements in line with amendment to JAS law. As of today, 7 agricultural crops, namely soybeans, corn, rapeseed, potatoes, cottonseed, alfalfa and sugar beet, as well as 32 food groups which are fabricated by use of the 7 crops are subject to labeling requirements. Bean curd and soybean paste, which are very common in Japanese dietary pattern, are also included in the category.

In case GMO is not used, it should be labeled as "no GMO is used", which is generally called "non GMO". Soy sauce and potato flake products are not included in the category, but it is common to label "non GMO". As GMO is a still young technology and its safety to human being is not clarified yet, food fabricators as well as fast-food industry have to be sensitive to non GMO consciousness of consumers and try to convince consumers that GMO is not used in their products.

In Japan, in line with high dependency on import, Identity Preserved Handling System is introduced to assure the import food goods are non GMO and free from GMO contamination in the logistics steps of import, starting from an origin of farming in foreign countries through fabricators in Japan.

The ability of tracing back to the origin is called, in another word, "traceability", which is a key word being commonly used in the food industry these days. Responding to consumers' strong desire of information disclosure, each fabricator in Japan tends to have its own severe standard in regard to usage of GMO as well as its labeling. Generally speaking, Japanese fabricators are not positive to the usage of GMO so much.


Fig.2-03: Labeling Obligation of Genetically Modified Organisms (GMO)


Labeling Obligation of Allergenic Material

Labeling obligation of allergy started in April 2002, one year later succeeding GMO labeling.

Out of allergenic foods, 5 articles, namely egg, milk, wheat, buckwheat and peanuts, are subject to labeling obligation when in use. In addition, 20 articles are subject to labeling recommendation, namely abalone, squid, salmon roe, shrimp/prawn, orange, crab, kiwifruit, beef, tree nuts, salmon, mackerel, soybeans, chicken (poultry), pork, mushroom, peach, yam, apple, gelatin and banana. Articles of which allergy contents are proved lower than "ppm" are exempted from labeling obligation, such as enzyme products which use extremely small amount of allergenic material or some auxiliary agents which have fabrication processes to clean up allergenic material. But, in over all, exemptions as such are not many.

Different from other food additives, allergy stuffs contained in the food had been exempted from the regulation. Because of that, in many cases of small amount of allergy contents, labeling had not been in practice. Driven by the new regulation as well as fatal incidents triggered by allergy, all food manufacturers rushed into re-investigation of raw material, some took more than one month, by which the food industry fell into a turmoil for a while.

Eventually, information disclosure of the food industry (allergy as well as GMO) has advanced quite rapidly. In February of this year (2008), it was decided to add "shrimp" and "crab" to the obligation list.


Fig.2-04: Labeling Obligation of Allergenic Material


Mad Cow Disease (BSE)

Next, let me refer to bovine spongiform encephalopathy (BSE), so called mad cow disease, Since BSE was confirmed for the first time in the United Kingdom in 1986, it spread over to European countries rapidly. In Japan, the first BSE cow was confirmed in 2001. In 2003, it also broke out in Canada and USA, which are major exporting countries of beef to Japan. Symptoms are seen mostly with cows being fed with infected bone-and-meat meal. Prion protein is considered to be the cause.

The cow which got BSE is unable to walk and will die eventually. When Japanese TV broadcasted the BSE cow, which was unable to stand and was drooling copiously, people were shocked with fear. BSE cows have been confirmed mostly in the United Kingdom, second to none. In Japan 34 cases have been confirmed so far.


Fig.2-05: Number of BSE Cows by Country

The most concerned with BSE is infection to human being. Variant Creutzfeldt-Jakob disease (vCJD), of which linkage to abnormal prion protein of BSE cows is strongly suspected, is an intractable disease with symptoms of perceptual disorder, walking difficulty, muscular paralysis and so on. Incubation period is 1 to 20 years. Sideration-to-death is very short, one year in average. Then, Office International des Epizooties (OIE) have publicized specified risk material (SRM) which tend to be abundant of abnormal prion protein, and have alerted usage of SRM in food products. In Fig.2-06, blue-colored part corresponds to SRM, namely brain, vertebra, small intestine, excepting tongue and cheeks. In today's food industry, certificate of proving non-use of RSM is becoming a mandatory requirement. The requirement is not limited to meat, but extended to other cow-origin products such as beef extract and gelatin


Fig.2-06: Specified Risk Material

BSE had a big impact to Japanese food industry. Transition of beef source is shown in Fig.2-07. Australia and USA were major 2 countries of import source until 2002. However, soon after BSE cow was confirmed in USA in 2003, import was suspended. It was because USA was reluctant to blanket testing, the safest standard that Japan had introduced since the first domestic confirmation of BSE in 2001. Beef exporters in USA as well as Japanese fabricators suffered from big impacts due to a long period of the suspension. Currently, import from USA is restarted.


Fig.2-07: Source of Beef in Japanese Market (Ministry of Finance, statistics)


Bird Influenza

Next is the bird influenza, which is spreading in Asian countries. Bird influenza is an infectious disease of a high fatality rate which is peculiar to chicken, duck, turkey and quail. Neurological symptom and respiratory symptom are the ones typically observed. It draw a high attention when infection to human being was confirmed on the occasion of prevalence of Hong Kong flu in 1997-98.

Today, when bird influenza is confirmed, shipment is suspended from the chicken farms, not only from the farm where influenza is confirmed but also other farms located within some ten kilometers. It is not only to prevent infection to human being but also is to prevent expansion of influenza virus to other areas. While infection from bird to human being has been confirmed, no report of infection of the person who ate bird meat or egg. Because the influenza virus dies with heat of 75 degrees Celsius or higher over 1 minute, heat-cooking will dissolve a concern if any.


Fig.2-08: World Map of Bird Influenza

World map of Fig.2-08 shows areas where bird influenza has been confirmed and the level of infection. The area has been expanded year by year and infection to human being has been confirmed in dark-red colored areas. Fig.2-08 includes information regarding infected area, which indicates high fatality rate of infected patients (yellow box). In Indonesia, it exceeds 80%.

H5N1 bird influenza virus is one of those which causes high fatality rate. When virus of the kind infects human being one after another while transforming to various types of virus, it could lead to a disastrous expansion so called "pandemic". Spain flu of 1918 was a typical example. It is recorded that 40 millions of people were killed by the flu over the world, equivalent to 3% of then estimated world population 1.2 billion. WHO is keeping a cautious attention on bird flu of high fatality rate, and has simulated pandemic of 2 to 7.4 millions of fatality, while estimation from Spain flu could indicate 100 millions of fatality or more.


Fig.2-09: Source of Chicken Meat in Japanese Market (Ministry of Finance, statistics)

In 2002, domestic production of chicken meat was 1.206 million tons and import was 0.524 million tons. Out of import, 34.9% was from Thailand, 32% from Brazil, 22.7% from Chine and 9.5% from others . In January 2004, chicken flu was found in Thailand and China, which led to suspension of import from both countries. Japanese consumers have had no chance to find Thai and Chinese chicken meat on the shelf of super markets. Aver all consumption has also decreased. Import from bird influenza infected countries is still suspended.


Positive List of Agricultural Chemicals

On May 29, 2006, the Positive List system was introduced, which is to ban sales of food containing residual chemicals exceeding the limit. It covers agricultural chemicals, feed additives and drugs for animal. The biggest difference from the previous system is that 0.01 ppm of baseline criterion was introduced. EU and Germany have adopted the same criterion. It is severer than New Zealand and Canada, which have adopted 0.1-0.01 ppm.

After introduction of the revised system, there have been an increasing number of cases that imported vegetables, fruits and fruit product are rejected at the quarantine station of airports and/or harbors as they violate 0.01 ppm criterion. As a matter of fact, for several months after the introduction, there was a sharp drop of import amount of vegetables and agricultural products.


Fig.2-10: The Positive List System

Introduction of this sysytem has prompted a sensitive view on fabricated food products including imported vegetables and agricultural products. As a new tendency, big supermarkets are positively emphasizing safety of vegetables by attaching, on the surface of vegetable packs, pictures of producers of contracted farmers.

On the side of producers, they have been receiving 2 major instructions since prior to introduction of Positive List system. Number 1 is an observance of restrictions in regard to the kind of product to which the agricultural chemicals can be applied, amount and/or density of the chemical to be used, time of window when the chemical can be sprayed as well as a frequency of spraying. It is said that the residue criterion can be met by severely observing the instruction. Number 2 is a counter measure to minimize drift of chemicals to surrounding farms. One farmer, while not using the chemical, can suffer from the neighboring farm if the chemical is sprayed in a strong wind. The farmer can otherwise offend the neighbor in the same manner.


Fraud Labeling

The next recent issue is "fraud labeling", which was revealed one after another in the last year (2007). A well-established cake manufacturer, meat fabricator and many other food fabricators were detected of fraud labeling to an increasing disbelief of consumers. Some deceitfully labeled producing area as the one well-known of its high quality, some disguised best-before date, some labeled usage of beef while using other meats. Those companies were ordered to suspend business and were forced to receive guidance under control of Ministry of Agriculture, Forestry and Fisheries. Consumers' concerns were centered to this problem through the year. In Japan, there is a custom to invite public opinion at the year-end and select a word which typically represents the past year. A word selected for 2007 was "ni-se", a Japanese word which means "fake".

Food companies, in their efforts of wiping out consumers' disbelief, retrained employees to comply with laws and regulations. In addition, they had to relook at companies' social responsibility that they had to contribute to the society though running business. These days, "Corporate Social Responsibility (CSR)" is the word being frequently heard in the food industry.


Fig.2-11: Fraud Labeling Problem of 2007


Summary

Japanese food industry, which have experienced BSE, bird influenza, GMO, allergy labeling and many other problems as have been reviewed so far, is supposed to move towards a new trend.

Key words of "cheap"and "volume production" are going to be old ones. In stead, more focus will be put on consumer-oriented product. Japanese consumers have severe eyes and pursue "safety" and "peace of mind" all the time. Safety is a scientific proof that hazard against human being and environment are removed. Peace of mind, on the other hand, is a psychological confidence to the company or products that high quality is guaranteed.

There are 3 items considerable to provide consumers with safety and peace of mind.

  • Traceability is an essential system to provide consumers with sufficient information in regard to raw material and source of products. It also enables the practical lot control of finished goods.
  • Disclosure is to provide consumers with precise information quickly, which company is responsible for. Not small number of companies have put this policy in practice already.
  • Compliance is a strict observance to the law. It can be re-phrased as "not to lie". But, we still see some companies are losing consumers' confidence through insufficient disclosure or erroneous disclosure of information.

Putting 3 items in practice alone, we can provide consumers with "safety" and "peace of mind". Japanese economy is recovering from a long period of stagnation. Without doubt, food material and fabricated food products from Thailand will be accepted so far as they satisfy conditions of "safety" and "peace of mind". We will pay our best efforts via foods so that Thailand and Japan co-exist and prosper each other.


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Date of publicity:

2008/3/24

About auther:

Current Adviser to & Former President of Dai-Nippon Meiji Sugar Co.,Ltd.
Former President of Mitsubishi Company (Thailand) Ltd.


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