Kavan Choksi: Price Hikes Expected to Hit Japanese Consumers

As a result of the ongoing coronavirus pandemic, Kavan Choksi believes Japanese consumers should expect to face additional challenges. A wave of price increases will hit essential items such as food and daily goods in the new fiscal year, which began recently, due to rising raw material costs.

Because there will be changes in some social systems closely related to people's day-to-day living in fiscal 2022, such as a reduction in public pension benefits, rising prices are likely to hit socially vulnerable people, especially pensioners.

Megmilk Snow Brand Co., Meiji Co., and Morinaga Milk Industry Co., for example, have announced price increases for cheese. In contrast, The Nisshin OilliO Group Ltd. and J-Oil Mills Inc. have announced price increases for cooking oil for household use.

Other food items that will see price increases include Kagome Co.'s tomato ketchup and Yaokin Co.'s "Umaibo," a popular snack that translates as "delicious stick" and has been sold for more than 40 years at 10 yen ($0.08) without tax. According to the snack maker based in Tokyo, the new price of "Umaibo" will be 12 yen.

The factory prices of Nippon Paper Crecia Co.'s tissue and toilet paper and some diaper products from Kao Corp will rise in terms of daily goods.

The country's primary transportation system is no exception. The East Japan Railway Co. will raise bullet train ticket prices during peak season, and Kyushu Railway Co. will raise prices. Japan Airlines will also raise ticket prices for domestic flights. In addition, Bridgestone Corp. and Michelin Japan, the Japanese arm of the French tire giant, will increase their tire prices.

In Japan's public pension system, benefits will decrease by 0.4 percent as wages fall due to the impact of the pandemic. In addition, the age range for receiving benefits will be expanded, with the upper age limit previously set at 75. Those between 60 and 70 can now begin receiving a pension.