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EU-Japan Economic Partnership Agreement (EPA) from the Perspective of a Wholesale Company

Ivonne Julitta Bollow, Director International Affairs for Corporate Communications and Public Policy, METRO AG

On the occasion of DJW "Asa no Kai" on June 5, 2018, in Duesseldorf

Mi 06.06.2018, 12:05 Uhr

Introduction

This week is very special for us here at METRO Düsseldorf. You can tell how special it is by the fact that we have invited you, Consul General Mizuuchi, to visit us twice this week. Today we have the privilege to welcome you together with the German-Japanese Business Associ-ation for an “Asa no Kai” on the EU-Japan Economic Partnership Agreement. And on Thurs-day we may welcome you again to celebrate the reopening of our Düsseldorf store right around the corner. Both these events are closely linked: what we talk about in theory today, we’ll show in practice on Thursday. Also because of the dynamics that are unfolding follow-ing the EPA, our Düsseldorf store is now massively expanding its Japanese assortment.

So I could just jump to a first conclusion: EPA is definitely good for METRO! But what about the smaller entrepreneurs? The little restaurant at the corner, where you love to get lunch? Or the grocery shop, where you buy some foodstuffs, which you need for dinner. What is with all these businesses that make our neighborhood more colorful? Looking to the EPA: Is there anything in for them?

And why do I care? METRO is one of the largest wholesale companies in the world. We op-erate in 35 countries with around 150,000 employees working for 21 million customers. We are, what you would say, a global company in the true sense of the word. But in every mar-ket, in which we operate, we understand ourselves as a local company - a local company which cooperates with local businesses. And these are: hotels, restaurants, caterers and grocery shops/ neighborhood shops. We aspire for: Becoming a champion for independent business. What does this mean for us: Understanding the challenges of sustaining your own business, understanding specific demands. Offering respective products, services and solu-tions, which help entrepreneurs to focus on what counts for them – and support them to win through.

Most of our customers come from the food sector – in Japan, we they are mainly restaurant owners. There has been plenty of discussion, whether the free trade agreement between the EU and Japan can be summarized as “food for cars”. Let me instead demonstrate to you that the EPA is also a proof for our company’s belief that food is an integral part of our life. That food helps us connecting across levels, countries, and cultures.

So please allow me to elaborate on the changes and benefits EPA will bring to independent businesses in Japan. Let me give you some insights on how our European customers and Japanese food producers will benefit from the agreement. And finally, I’d like to take the ex-ample of METRO, which I already alluded to, to describe some of the positive effects of this agreement.

Changes and benefits of EPA to independent business in Japan

Let’s start in Japan. According to Japanese government statistics, the annual number of Japanese visits abroad has never been less than 15 million since 1995. Around 4 million of these visits are paid to Europe. According to a recent survey, 45% of Japanese travelers name good food, wine, local cuisine as one of the top 4 factors for choosing a travel destination. While other key factors like world class beauty, history and heritage have the obvious disadvantage that you cannot relive these experiences– foreign food can be experienced back home. But: this is, so far, true only in theory. Until now, restaurants in Japan were not able to provide their guests with the selection of foreign products which they desire or were just not able to do so at a reasonable price.

Let’s take a look to Italian restaurants in Japan. The streets of Tokyo, Yokohama, and Osaka are full of pizzerias, osterias, and trattorias. Until now, METRO is able to provide chefs in these restaurants with:

  • 115 food products imported from Italy, such as pasta, olive oil, vinegar, tomato cans and pouches, as well as coffee,
  • 60 types of Italian wines,
  • eight types of Italian beer,
  • and five types of Italian frozen food.

What is missing? Of course – cheese from Italy as well as processed meat that make your pizza an authentic dish – and the restaurant owner a perfect host.

But this should soon change: chefs of restaurants with European cuisine can look forward to a wide range of world class Italian products due to what Commissioner Malmström calls “considerable improvement of market access conditions”:

  • Following some Prosciutto di Parma as a starter,
  • Restaurant guests can look forward to a wide range of parmigiano
  • as well as fresh and processed cheeses like mozzarella, blue veined cheese on their pizza and soft cheeses like feta in their salad or camembert and brie
  • together with an extensive assortment of European wine

Talking about European wines: due to fully scrapped tariffs it is very likely that EU wines regain their once strongest market share in Japan which has been lost to Chilean wines over the past decade. But this is not even the real highlight of the EPA in this context – it’s the facilitated recognition of key wine additives which are used all over Europe – but so far not allowed in Japan. 

Just as an example: the non-recognition of Meta-Tartaric Acid or MTA is one of the biggest obstacles preventing us from providing our Japanese customers with a wider selection of excellently tasting inexpensive wines from Europe.

EPA for own businesses in Europe and Japanese food producers

Now that I’ve shown you how European food produce can change the restaurant world in Japan, I’d like to shift your attention to food producers in Japan. Will the EPA work also the other way around? And can European consumers also benefit from the EPA? Yes, both can and both will!

In a recent meeting with the German Ambassador to Japan, Mr. Hans von Werthern, he mentioned that one of the reasons why he will really regret to leave his post in Tokyo is how much he will miss Japanese restaurants. Not that Japanese chefs in Germany were not as good as their counterparts in the motherland. But they simply lack the right ingredients. As mentioned earlier, now there is reason for hope for the Ambassador and the millions of European gourmets, who love to dine out in Japanese restaurants.

Here in Düsseldorf, already in 1963 the first Japanese restaurant opened.

  • But despite a high and increasing demand, our store in Düsseldorf offered only around 40 products imported from Japan.
  • This year, we will add 70 new Japanese products, more than doubling our selection of Japanese imports. And it is not only Düsseldorf. METRO Germany is currently setting up an online catalogue featuring 168 Japanese import products, ranging from Udon noodles over various tofu products to the famous Sake. We are confident that this new range will provide the Japanese chefs all over Germany with the right ingredients to make their business more successful.

So yes – the EPA will help the hospitality sector to make a difference for its guests – both in Japan and in Europe, in cultures, where food is an integral part of social life.

Positive effects for METRO

Let me conclude with EPA benefits for METRO: Last year, after 8 years of consolidation, METRO Japan opened store No. 10. The prospect of being able to provide a greater variety of products at a competitive price level for our target customers gave us a huge push and plenty of confidence. Such a “moral boosting effect” can be an essential part of FTAnegotiations. And we have felt it.

And a final thought on METRO Japan: METRO is the global industry leader in the Dow Jones Sustainability Index. This is the kind of expertise which our partners in Japan always highlight as a true differentiator. With METRO’s know-how in sustainability and our understanding of how to bring sustainable products to the market, we can also set new benchmark for Japanese competition for the better of everyone. We very much hope that we’ll be able to showcase this during the 2020 Tokyo Olympics for which we are currently applying as an exclusive food distributor. 

Please wish us the best of luck for our application, enjoy your visits at our customers – may they be the Nikko Hotel, the Nagaya, or the Yabasa, just to mention a few – and thank you very much for your attention.

More information on the "Asa no Kai" on June 5, 2018, can be obtained here

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