Japanese seafood bankruptcies remain high

News 11:12 13/09/2014 502
The number of bankruptcies filed by seafood related companies in Japan, which had more than JPY 10 million (€76,000/ $100,000) in debt, climbed to 82 in the first half of 2013, according to figures from Teikoku Databank.

These statistics include companies involved with fisheries, aquaculture, processors, wholesalers, and retailers.

Even though the number is in decline from a record high of 95 cases in the latter half of 2012, this trend is not likely to disappear, and today the number is as high as it was when Lehman Brothers went bankrupt in 2008.

In July, 22 companies filed for bankruptcy while a further 13 filed in August. This is expected to continue for the rest of the year. By sector, seafood processors were hit the hardest with 26 companies going bust. In terms of debts, eight out of 10 firms belonged to this particular sector.

The trend is partly blamed on reasonably priced goods being imported from other countries, combined with advanced freezing and processing technologies.

Meanwhile increasing fish prices attributable to a worldwide hike in seafood consumption and decreased catches in Japanese waters triggered by abnormal weather are also behind the trend.

On the other hand, seafood consumption in Japan has been dwindling and companies that have failed to pass higher raw material costs onto consumers are being hit.

Hokkaido-based Kushiro Marusui Corp. filed an application for bankruptcy in July. The company engaged in manufacturing and wholesaling of salted salmon, sashimi grade octopus, and salmon flakes using chum salmon and octopus landed at the Shiranuka Port.

At its peak back in 1989, sales reached about JPY 12 billion (€91 million /$121 million). In recent years, in the midst of rising fish prices caused by weak catches, plummeting selling prices on account of lackluster consumption, as well as deflation, sales were adversely affected. A significant deficit from inventory disposal led to insolvency.

Furthermore, the seafood industry has suddenly encountered an appreciated yen that generated skyrocketing fuel prices in spring, which led to halted operations of 1,000 squid fishing boats all at once.

Even in Hokkaido, it is said that the rising seawater temperature is resulting in poor catches.

With contaminated water leaking from the crippled Fukushima nuclear plant in addition to dicey catches, more expensive raw materials and fuel costs, and humdrum domestic consumption, the hardships the industry is facing is bound to continue.

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