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Affordable Beef Makes a Hit With the Japanese : Trade: With tariff cuts lowering the price, American steak is fast becoming an everyday menu item.

April 05, 1993|From Reuters

TOKYO — One myth about the Japanese--that only locally raised wagyu beef will satisfy them--seems to be crumbling after two years of intensive sales efforts on the part of foreign beef producers.

"We used to have wagyu steak as often as once a month or so, but now we enjoy eating American or Australian beef steak as a daily meal," said Aiko Takeda, a middle-aged housewife in the suburbs here.

This week, beef import tariffs were cut to 50% from 60%, but most shoppers were unaware of the change, since foreign beef is already cheaper than domestic meat. And consumers know it.

Supermarkets, major retailers of imported beef, did not even bother advertising bargains in American and Australian-produced steaks this year, as they did in the last two years. Their customers are already familiar with foreign products, industry analysts said.

"The tariff cut is not sensational at all this time around," said Toshiyuki Watanabe, a senior official at the semi-government Livestock Industry Promotion Corp.

The LIPC, which used to control most of Japan's beef imports, has served as an information body since the government abolished import quotas on April 1, 1991.

To compensate, the tariff was raised to 70% from 25%, but has been gradually reduced by 10 percentage points a year. Further cuts are to be negotiated under the General Agreement on Tariffs and Trade.

"This tariff cut will result in about a 3% drop in retail prices. As prices are already low, consumers don't see much difference in paying 310 yen ($2.71) for 3.5 ounces, or 300 yen ($2.62) for Australian beef steak," Watanabe said. The foreign beef price works out to about $12 a pound--still cheaper than Japanese beef, which sells for $20 a pound and up.

According to a recent LIPC price survey of about 70% of Japan's supermarkets, Australian steak is often only a third the price of high-quality domestic beef such as the fat-marbled, beer-fed wagyu variety. American beef is slightly more expensive than Australian.

Before Japan opened its beef market, it was often said that Japanese consumers would not go for foreign products because their beef was made to taste a certain way in traditional dishes such as sukiyaki and shabu-shabu .

But the facts show otherwise. The government's Economic Planning Agency said last month that 50% to 60% of Japanese consumers surveyed found the taste and texture of imported beef more or less the same as that of domestic beef.

Total beef demand in Japan peaked in August, 1992, at about 74,000 metric tons a month. The amount is expected to rise when the sluggish economy improves.

"People have stopped eating steak at family restaurants, and that's no good for imported beef," said Makoto Fukase, a senior official of the Japan Meat Traders Assn.

Even with the tariff cut, demand is unlikely to pick up this year unless people start to eat out more often, he said.

Six trading houses and meat processors account for more than half of Japan's beef imports. These importers, most of which have ties and joint ventures in Australia or the United States, continue to buy regardless of demand.

Official figures show Japan imported 411,000 metric tons of beef in 1992, most of it from Australia and the United States. Japan produced 414,000 metric tons of beef in that period.

Japanese beef accounted for nearly 60% of the total in fiscal 1988, when Japan agreed to open its market to imports.

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