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‘Abenomics’ fallout: Food prices rise on weak yen but wages stay flat

by Hiroko Nakata

Staff Writer

As the weakening yen bites into profits, a number of Japanese food suppliers hiked prices Monday on a wide range of products, including ham, sausage, pasta, bread and mayonnaise, dealing a blow to consumers who have yet to see a pay raise thanks to “Abenomics.”

Generally, the items most sensitive to currency movements are made from imported grain, or oil from imported seeds. Animal feed, much of which comes from abroad, has also helped push up chicken and pork prices.

“There are many reasons for the price hike but, above all, the biggest reason is the currency,” said Takaharu Kiuchi, a spokesman for Prima Meat Packers Ltd.

Rather than directly charge more for their products, ham and sausage makers are instead putting less in their packages. For example, on Monday industry leader Nippon Meat Packers Inc. began shipping lighter packages of 89 ham and sausage products. The same goes for 62 processed food products, including chicken nuggets and hamburger. The move translates to an 8 percent price hike on average, the processed meat maker said.

Similarly, partly through size reductions, Prima also raised the prices on domestic items by 7 percent on average and imported prepared food by 13 percent. Itoham Foods Inc. will charge 8 percent more on average for ham, sausage and other items starting July 22.

The companies blamed the hikes in part on the rising price of imported plastics used for packaging as well as vegetable oil.

In April, the lower yen prompted the government to raise the wholesale price of imported wheat by an average of 9.7 percent to ¥54,990 per ton, the second rise since October.

Consequently, wheat flour and bread makers raised prices.

Nisshin Seifun Group Inc. raised wheat prices by 2 to 7 percent and pasta sauce prices by 9 to 11 percent.

  • phu

    I will never understand how people thought this would just magically happen. The government has intentionally sabotaged the value of every importing or import-dependent (read: almost every company anywhere, to some extent) company’s profits… and yet they thought this would prompt everyone to benevolently increase their employees’ salaries?!

    “Here, we’re going to help you out. You just keep doing the same volume of business, but we’re going to make sure the income you get from it isn’t worth as much. Hey, why aren’t you paying your employees more?”

    Then, of course, we have the fact that even if you’re solely an intra-Japan producer, you’re somehow supposed to pay your employees more so this government can have its ridiculous pipe dream. Anyone who knows what it’s like to run a business can tell you that it’s VERY rare to be able to just say to your employees “hey, sorry, your cost of living has increased; even though that’s not our fault, and our income hasn’t increased at all (and may have decreased), we’ll just go ahead and pay you more. After all, that’s what Abe wants.”

    This is profoundly stupid. Unforgivably stupid. Anyone who believed in this outcome has absolutely no place in any position of responsibility.

  • Maxwell

    the price rises in food are disproportional to the yen movements, like everything it’s a one way street with these ‘governments’, take gasoline, Japan pays for oil in USD, but when the USD was super weak agaisnt the yen we did not see cheaper gas prices, yet as soon as the yen started to move back to more ‘normal’ levels gas prices shot up – I smell a rat.

  • StevenStreets

    Paper-nomics of fiat specie has eviscerated the USA middle class in the last 100 years. The poor suffer most from wage depreciation-inflation and anyone who offers them aid is slandered a socialist.

  • Sugar

    I’ve come to like Ramen noodle recently, though I live in what is called the town of Ramen..

    I’m very unhappy to see the news.

  • Paldo

    Where is Moses who can lead all the Japanese out of agony?