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Scandals cause Japanese to lose their appetites

March 25, 2002 The Washington Post by Akiko Kashiwagi
To 56-year-old Nobuko Nito, having a steak for dinner was a special treat. She especially favored Japan's premier Wagyu beef, which sells for as much as $ 48 a pound. But today, she swears she will not eat beef again because, she said, "You don't know what you are eating!"

Nito's suspicions have been fueled by a succession of food scandals in Japan that have crumbled a myth long cherished by consumers: that Japanese brands of food are best. Consumers have proven their faith through the years by paying extraordinarily high prices for Japanese products. The Wagyu favored by Nito, for example, costs three times more than the Australian beef widely available here.

But the scandals have caught some of the most trusted Japanese brands with their quality control down.

Snow Brand Milk Products Co., one of the largest dairy conglomerates in the country, was caught in July 2000 putting milk through unclean pipes. It made more than 13,000 people sick. Snow Brand's post-apology strategy was to sell its milk under different brand names.

Japan's first reported case of "mad cow" disease in September came with revelations that the government had tried to play down the problem and had delayed banning the use of bone meal as cattle feed, the suspected cause of the disease, which is formally known as bovine spongiform encephalopathy.

Then in January, Snow Brand Foods Co., a subsidiary of the dairy giant, was found to be passing off imported beef as being from Japan to get more subsidies from a government program to buy up domestic meat that could have been infected with mad cow disease.

Snow Brand was in the headlines again in February, this time for using butter past its expiration date in the processing of such products as ice cream. A few days later, one of Japan's largest meat packers, Starzen Co., was accused of selling retailers low-grade pork and other meat under a premium brand name -- a practice it admitted employing for years.

Between the major incidents, cases of mislabeling by scores of smaller companies mounted. And finally, this month, the clincher: A subsidiary of the National Federation of Agricultural Cooperative Associations (Zenno), a customer-oriented cooperative, was accused of selling Thai and Chinese chicken under a top Japanese brand name -- and falsely claiming on the label that there were "no agrichemicals used."

"We assume these are only a tip of the iceberg," said Nobuko Hiwasa, chairman of the National Liaison Committee of Consumers' Organizations.

This rap-sheet of scandals has hit the Japanese where their pride is -- on their dinner plates. Eating is high art and deep culture here. Food is -- or was -- one of the last areas in which Japan still felt a sense of domestic superiority. Almost universally, consumers felt their domestic brands were of top quality, meticulously prepared and eminently trustworthy.

But now, customers doubt nearly everything on any label -- the brand name, the expiration date, the additives and the source of the product.

"Until now, domestic products have been trustworthy but expensive. Now people see them as expensive but not trustworthy," said Satoshi Kai, professor of agricultural economics at Kyushu University in southern Japan. "It's an enormous impact."

Kai predicted that the suspicion would not be limited to meat, but would likely spread to other products, such as vegetables, for which there are huge price gaps between Japanese brands and imports.

Experts say this loss of faith may reduce that price difference as skeptical consumers refuse to pay premiums for Japanese brands.

More alarming for domestic producers, the mislabeling cases revealed that "people could not actually tell the difference in quality" between Japanese and imported products, Hiwasa said -- a death knell for the myth that Japanese food is better.

The beef industry has been the first to feel the consequences. The price of an average-quality cut of beef has dropped nearly 70 percent over the past six months, as people shun what was once one of the most treasured foods. Some cattle farmers are in danger of going bankrupt, and restaurants have scrambled to find a substitute on their menus.

Consumers are blaming not only the businesses, but the government regulators who were supposed to uphold the standards for Japanese food. Critics noted that the government's labeling rules are so lenient and its oversight so lax that the food industry has not felt bound by the laws. In fact, they said, government regulators in Japan customarily work to benefit industry, not consumers.

The penalty for falsifying labels in Japan is a maximum fine of $ 3,850. And that penalty is not imposed if a producer agrees to correct the labeling problem under the agriculture ministry's "administrative guidance."

In the United States, similar mislabeling would constitute a felony, according to the U.S. Meat Export Federation. Rumors of Japanese companies repackaging cheaper products to sell them as name-brand rice or top-brand beef have surfaced from time to time, but severe actions -- even disclosing the names of offending companies -- are rare.

"The government and politicians may have thought they were protecting" the agriculture industry, said Takeshi Domon, a well-known writer on agriculture policies. "But their [system] has come back to haunt them." By allowing mislabeling to run wild, the industry is now reeling, he said.

Agriculture ministry officials say they are lenient in part to protect companies that make an honest mistake. But they admit their regulatory framework, which is based on an assumption of honesty, was betrayed by wholesalers and retailers who tried to cheat.

Feeling pressure from the public, Agriculture Minister Tsutomu Takebe said last week that the government would review the labeling and inspection laws "from the standpoint of the consumer."

But some critics say the government and the agriculture industry, long in collusion, will not solve the problems. Usually docile Japanese consumers may finally be exercising their marketplace power. The multiple-offender Snow Brand is breaking up to merge with other companies, while its food subsidiary filed for bankruptcy that was brought about mostly by a consumers' boycott of the firm's tainted brands.

"It's a breakthrough," said Masayoshi Honma, professor of agricultural policies at Seikei University in Tokyo. "Consumers showed they aren't naive."

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