Japan Press Weekly

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2019 March 27 - April 2 [ECONOMY]

Abe regime supports increases in food prices before implementation of consumption tax hike

Urged by the Abe regime, major food and beverage makers in Japan will uniformly increase prices of foods and drinks this spring in advance of the sales tax rate which will be raised to 10%.

The upcoming government-led price rise came to light on March 20 during questioning by Japanese Communist Party member of the House of Councilors Yamashita Yoshiki at an Upper House General Affairs Committee meeting.

Yamashita in his questioning noted that food-related industries one after another announced price increases in such foods as milk, instant noodles, soft drinks, and frozen meals, and that each maker will likely maintain the increased price even after the consumption tax rate becomes 10% in October. Yamashita criticized the price increases to be initiated before the planned sales tax hike for "dealing consumers a double punch".

Prime Minister Abe Shinzo in response admitted to the government initiative by saying that his regime last November issued guidelines encouraging food industries to increase commodity prices prior to the tax hike in a bid to prevent a temporary surge in consumer demand before the implementation of the 10% consumption tax.

According to a Cabinet Ministry survey, many economy watchers are concerned about possible negative effects from the upcoming price increases: "With the forthcoming increase in food prices, a sense of helplessness is prevailing in many stores" (a convenience store manager); "Our main shoppers are pensioners, so we are worried about an additional decline in consumption" (a shopping mall administrator); "People's incomes are not increasing but prices in living necessities are continuing to increase" (a supermarket developer); and "Many of our patrons may become reluctant to hold banquets as before" (a city hotel operator).

In an interview with Akahata on a famous shopping street in Tokyo's Shinagawa Ward, an 83-year-old woman said, "Every day, I come here looking for cheaper products. I often use reasonably-priced canned mackerel, but I'm very disappointed to hear about an upcoming rise in the price of canned mackerel." A 70-year-old man said, "PM Abe cannot relate with the lives of ordinary people. Most of us struggle to make ends meet every day." A woman in her early 80s said, "The government kept telling us that revenues from the consumption tax would be used for the well-being of the people, but my pension income and buying power keep decreasing. It's not fair."