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Container shipping crisis bites Japan’s chicken and wine lovers

  • October 25, 2021
  • , Nikkei Asia , 3:42 a.m.
  • English Press

HIDEKI SHINOHARA, Nikkei staff writer

 

TOKYO — Japanese consumers can count the toll of disruptions in global supply chains and shipping on their dinner plates.

 

The country’s biggest convenience store chain, 7-Eleven, has stopped selling fried chicken on skewers — a popular snack — in certain regions. Meanwhile, some restaurants have limited poultry offerings to a paltry single skewer per customer. 

 

Chicken has become the most visible example of Japanese shortages stemming from Southeast Asia, where the coronavirus pandemic has slowed poultry processing plants in key supplier Thailand. But wine, shrimp and other goods have also grown scarcer or pricier in a trend that threatens hopes for a recovery in consumer spending.

 

Customer traffic has picked up in Japan since a coronavirus state of emergency was lifted, upsetting a delicate supply-demand balance in the food industry. As cities ease coronavirus-related restrictions on restaurant hours and alcohol sales, one yakitori chicken restaurant chain has told customers they are only allowed to have one chicken skin skewer each.

 

“We need to consider changing suppliers,” a spokesperson said.

 

A chicken shortage has forced some yakitori restaurants to introduce a limit of one chicken skin skewer per person.
 

Italian eatery chain Saizeriya has cut down its portion offerings for a popular spicy chicken dish since Sept. 21. Now instead of five pieces of chicken, customers only receive four.

 

Part of the reason for the chicken bottleneck in Thailand is a shortage of migrant workers from surrounding countries, which in turn prevents processing plants from regaining capacity quickly.

 

A shipping crisis caused by congested ports and a shortage of shipping containers have compounded the problem. Japanese inventories of imported chicken in August were down 20% from year-earlier levels, according to Tokyo-based Agriculture and Livestock Industries Corp.

 

“Some products have been out of stock since September,” said one market source.

 

Frozen food seller Nichirei has struggled to find Cambodian workers for its Thai subsidiary. Factory utilization has declined, forcing the company to sell a new line of frozen fried chicken to limited markets this fall. Industry peers Nippon Suisan Kaisha and Ajinomoto Frozen Foods have also been affected.

 

Delays in container shipping have spilled over to other foods. Earlier this month, KFC stopped selling French fries at about 20% of its restaurants, mostly in Tokyo, owing to stalled shipments of potatoes. All French fry sales resumed Friday thanks to recent port arrivals.

 

Seafood distributor Maruha Nichiro has faced delays in shrimp imports from processing plants in Vietnam. It usually takes 22 days for the product to reach Japan, but now the company says it is 10 days to two weeks behind in shipments.

 

Drinks group Mercian has halted sales of 10 Franzia wines from early September. The company aims to resume sales soon, but “we do not see stable supplies in the foreseeable future,” a spokesperson said.

 

Beef and onions — two key ingredients in gyudon bowls of beef over rice, a Japanese fast-food staple — are rising in price.

 

For U.S. short plate beef used in gyudon bowls, the wholesale price now hovers around 1,075 yen ($9.47) per kilogram, or nearly double what it was last summer. Tokyo-based traders of Chinese-grown peeled onions used in many restaurants, now charge 95 yen per kilogram, up 20% from a year earlier.

 

Many in the industry believe supply chain disruptions will drag on. The potential for a resurgence of coronavirus infections in the winter adds to the uncertain outlook.

 

Restaurant operator Watami said big chains usually have medium- to long-term contracts with suppliers. They are high-volume buyers with a lot of bargaining power. But “if higher prices persist for six months or a full year, some sort of impact will emerge.”

 

The pandemic has inspired Japanese to cut back on spending. Higher prices at restaurants or supermarkets risk chilling an expected recovery in consumption following the lifting of a coronavirus state of emergency.

 

“Consumers may not be able to buy the items that they want,” said Koya Miyamae, senior economist at SMBC Nikko Securities.

 

“Assuming that infections are brought under control, there will be a global recovery in eating out and demand will rise,” Miyamae added. “If supplies decrease due to a shortage of containers or other factors, product shortages will likely continue.”

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