EU importers at Asia’s largest food and drink trade show find Japan’s tariffs and complex regulations hard to swallow
There were generous cuts of Iberian ham, sweet-smelling Gouda, succulent German sausages and rich Tuscan olive oils. Visitors strolled past exquisite Brussels pralines, sumptuous Linzer tortes and fresh-baked French viennoiseries, not to mention a spectacular range of wines. The gastronomic kaleidoscope provided a veritable culinary tour of Europe in a day.
Held at Makuhari Messe convention centre in Chiba prefecture, the 36th annual Foodex food and drink show attracted 73,556 visitors over four days in March. Helping present this feast were 400 exhibitors from 16 EU member states.
Food is, in fact, the number three EU export to Japan after the automotive and chemicals sectors, and the largest food exporters by value are France, the Netherlands and Germany. Nevertheless, the EU only has a 16% share of Japan’s food imports, well behind the United States’ 25%. Since the EU’s share of total world food imports is 21%, there is much unfulfilled potential for exports to Japan, concludes a recent study by economic consultancy Copenhagen Economics.
Meeting Japan’s strict traceability and food safety regulations could boost EU food exports to Japan, but the case of EU beef strongly suggests other considerations are at play when Japanese food policy is set. Despite European beef exporters actually meeting all Japanese government requirements, the ban on EU beef remains in force.
One glimmer of hope, however, comes after a study tour by the Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF) and the Ministry of Health, Labour and Welfare (MHLW) to France and the Netherlands last December. According to the Netherlands Embassy, the Japanese government is considering lifting the ban; although, it seems, only on a country-by-country basis.
High tariffs on certain products – such as pork, wine, cheese, butter and chocolate – also unfairly penalise European food importers. Lowering these tariffs would quickly facilitate more trade. But non-tariff measures arguably constitute the larger obstacle. In the area of processed foods, these barriers include rules for food additives, food safety, packaging and labelling which are either incompatible with EU rules, too strict or simply not clear.
EU exhibitors at Foodex Japan highlighted food additive rules as a particular problem. Felföldi, a family-run Hungarian sweets maker, wants to enter the Japanese market, but has stumbled over Japanese rules for food colouring E120. What is simply E120 in the EU is categorised further in Japan based on different component chemicals, only some combinations of which are permitted.
Gábor Paksy, a Far Eastern sales consultant for Felföldi, comments, “Rather than changing our E120 food colour to fit the Japanese requirements, we are considering buying the approved colouring agent from Japan to use to make products for the Japanese market.”
Not only newcomers to Japan face these problems; established food companies can suffer just as much. Lutosa Japan, a Belgian importer of potato products, has been doing business in Japan for 30 years. But Bernard de le Court, managing director at Lutosa, thought his company was out of luck when he heard of recent MHLW plans to remove 125 substances from the list of allowed food additives.
“One of these substances is said to be pepper extract, a very basic additive that does not pose any problems in Europe,” he explains. “If true, this will affect a number of our products in Japan. We will need to adapt production procedures and the additional costs will only be justifiable if sales are big enough.”
An enquiry to the Japan External Trade Organization (JETRO) in Tokyo about the MHLW list shed little light on the issue. According to JETRO, the MHLW is said to be considering deleting only “obsolete food additives.” What exactly that means, however, remains uncertain. It is this environment of unclear and poorly stated policy that makes the Japanese market so challenging.
Making sense of food additive regulations is no mean feat – even for seasoned Japan experts. “The allowed usage of certain food additives and their maximum level of usage set by Japanese authorities can create problems,” explains Benoît Chauvel, chair of the EBC Food Committee. “The maximum limits for benzoic acid or potassium sorbate, for example, can differ depending even on the type of food, and in some cases are much lower than in Europe.”
Athanasios Fragkis is managing director of Nostimia, a Greek importer at Foodex. “I am constantly looking for new European food manufacturers to represent in Japan, but I am increasingly being refused on the grounds that Japan is more trouble than it is worth,” he laments. “I am told that up-and-coming markets like China and India are also attractive. So why bother with Japan?”