Abenomics hits Yakult, the lunchtime tipple of 3 million Japanese schoolchildren and salarymen
September 13, 2013 Leave a comment
September 12, 2013 12:58 pm
Abenomics hits lunchtime tipple of schoolchildren and salarymen
By Jennifer Thompson in Tokyo
Inflation may be the holy grail of “Abenomics” but it has made an unwelcome appearance in lunch boxes and delivery trolleys across Japan: the popular Yakult milk drink is raising prices for the first time in more than two decades. Yakult, whose probiotic drink is doled out to schoolchildren and drunk by salarymen at their desks, follows McDonald’s burgers, soy sauce and mayonnaise among other foodstuffs and beverages that have upped their sticker prices.
But while the pricier shopping basket may appear to tally with the aims of Abenomics, the stimulus efforts launched by prime minister Shinzo Abe with the aim of banishing deflation, the real picture may be more complicated.
Yakult, drunk by more than 3m Japanese every day, and other higher priced staples are not charging more because of a resurgence in demand but due to the higher cost of raw materials, particularly those bought overseas with a weaker yen – not the “good” inflation desired by policy makers.
The 14.3 per cent rise in the price of squat bottles of Yakult, which will simultaneously be boosted with extra doses of ‘good’ bacteria, follows even bigger rises in the price of McDonald’s hamburgers at its 3,300 restaurants around the country, where cheeseburgers now cost Y150, up from Y120.
One month later in May Apple added Y16,000 ($159) to the price of iPads sold in the country. Tiffany, the luxury jeweller, has also raised prices twice this year in response to the depreciation of the yen and rises in raw material costs.
Price rises also risk creating a backlash from customers if incomes do not go up – a fear underlined by calls this week from a Bank of Japan board member for companies to lift wages to reflect the improving business conditions.
Naohiko Baba of Goldman Sachs says that the Abenomics boom will remain fragile until companies raise employees’ wages.
“Consumption has risen more quickly than incomes, the buying is largely sentiment driven,” he said.
Many private sector economists also believe the Bank of Japan’s goal of achieving 2 per cent inflation in two years is too ambitious.
Yakult, which last raised prices in 1991, is the highest profile Japanese brand name to date to follow suit.
Both drinks will rise in price from Y35 to Y40 per bottle in November.
The Tokyo-headquartered manufacturer expects to maintain sales of the drinks as they are simultaneously upping the amount of bacteria in the products, which the brand promotes as being good for the digestive tract. It currently sells more than 3m bottles of Yakult per day in Japan, and about 174,000 of Yakult Calorie Half.
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