why is wine so expensive in Japan?
Well, contary to common belief the main issue is not really shipping costs (less than JPY 100 per bottle), import duty (less than JPY 100 per bottle) or consumption tax (8% - payable on the total import value). So if you take your average bottle for sale in France at say 10 Euros and strip out the usurious European VAT rate then add back the aforementioned costs of getting it into the country we are even stevens. Yet wine seems to end up costing triple in Japan - where on earth does this multipler effect some from?
As far as we are concerned the reason is fourfold.
1. A very inefficient multi-layered distribution system with ancillary baton-wavers and their otherwise unemployed ilk adding needless cost at each stage. Perhaps that is unfair. The real issue is extremely modest storage capacity in bars and restaurants coupled with high real estate costs, which results in high logistic costs involved with wine distribution and storage: a bar or restaurant will typically use an intermediary (sakaya-san) to store and supply drinks supplies on their behalf rather than buying directly in bulk from importers with an obvious knock on in terms of costs and therefore ultimate price. Takubin a case of wine within Tokyo and it costs something like JPY 125 / bottle - compared with <JPY 100 / bottle to transport it all the way from Europe, Australia, California, etc., to Japan.
2. The cult of kawaii and the perfection psychosis Japan's precious Veruca Salt expectation of cosmetic perfection is much feted globally. The implications of this misplaced sense of entitlement on wine is that bottles with superficial damage such as a slightly torn label that are otherwise sound are effectively unsaleable. This high level of wastage obviously needs to be recovered through higher wine prices.
3. The construction industry, a giant vampire squid sucking the lifeblood out of the economy In 99% of cases, when taking over a premises in Japan the building will have been returned to its original concrete shell by the outgoing tenant. So picture if you will your typical over gilded Tokyo restaurant: when the lease is up that beautiful interior all gets thrown away and the incoming lessor starts all over again. When we say all that we mean literally everything: kitchen units, aircon, ceilings, flooring, wiring. There is a second hand market for some of this stuff but it is thin so basically when we are talking about wanton destruction on a huge scale that sustains another whole industry of ancillary baton-wavers and their otherwise unemployed ilk. A fit out to a reasonable standard including architects' fees, etc., will cost around JPY 1 million per tsubo. This obviously needs to be recovered over the life of the restaurant and of course it is the end consumer that ultimately picks up the bill through inflated prices, perhaps as much as 25% on the final bill.
4. People don't drink enough Although wine consumption in Japan has been steadily increasing over the years, and Japan is the largest Asian market for imported wine, it is still only around two litres per person per year. This compares with over 50 litres in France and is only around 50% of the global average. This all means that in order to cover their fixed costs, importers, retailers and restauranters have to add a high margin at each stage of the chain - some admittedly more than others (although we are not accusing anyone of a champagne charlie lifestyle).
Time then to change all that - but it take two to tango and we need your help
1. We either buy directly either from importers or import ourselves, store in our temperature controlled warehouse facilities until the wines are at optimal drinking point and bring to you directly.
2. We don't care about cosmetic imperfections and nor should you Call us controversial, but we think that the actual wine itself is the most important aspect of a bottle so we don’t mind if there happens to have a soiled label. We're not saying that we are a wine equivalent of the Hospital for the Ruptured and Crippled but we certainly don't turn them away.
3. Every Yen spent on the construction industry is in our book one Yen more on the bottle of wine so we have rolled up our sleeves and fitted out much of this beautiful restaurant ourselves using as much recycled material as possible. We are rather pleased with the overall effect. We hope that you agree. May this be a template for a more sustainable Japan.
4. And so we come to our Faustian pact with you the drinker: you drink without moderation, we keep margins within (and vice-versa).
As far as we are concerned the reason is fourfold.
1. A very inefficient multi-layered distribution system with ancillary baton-wavers and their otherwise unemployed ilk adding needless cost at each stage. Perhaps that is unfair. The real issue is extremely modest storage capacity in bars and restaurants coupled with high real estate costs, which results in high logistic costs involved with wine distribution and storage: a bar or restaurant will typically use an intermediary (sakaya-san) to store and supply drinks supplies on their behalf rather than buying directly in bulk from importers with an obvious knock on in terms of costs and therefore ultimate price. Takubin a case of wine within Tokyo and it costs something like JPY 125 / bottle - compared with <JPY 100 / bottle to transport it all the way from Europe, Australia, California, etc., to Japan.
2. The cult of kawaii and the perfection psychosis Japan's precious Veruca Salt expectation of cosmetic perfection is much feted globally. The implications of this misplaced sense of entitlement on wine is that bottles with superficial damage such as a slightly torn label that are otherwise sound are effectively unsaleable. This high level of wastage obviously needs to be recovered through higher wine prices.
3. The construction industry, a giant vampire squid sucking the lifeblood out of the economy In 99% of cases, when taking over a premises in Japan the building will have been returned to its original concrete shell by the outgoing tenant. So picture if you will your typical over gilded Tokyo restaurant: when the lease is up that beautiful interior all gets thrown away and the incoming lessor starts all over again. When we say all that we mean literally everything: kitchen units, aircon, ceilings, flooring, wiring. There is a second hand market for some of this stuff but it is thin so basically when we are talking about wanton destruction on a huge scale that sustains another whole industry of ancillary baton-wavers and their otherwise unemployed ilk. A fit out to a reasonable standard including architects' fees, etc., will cost around JPY 1 million per tsubo. This obviously needs to be recovered over the life of the restaurant and of course it is the end consumer that ultimately picks up the bill through inflated prices, perhaps as much as 25% on the final bill.
4. People don't drink enough Although wine consumption in Japan has been steadily increasing over the years, and Japan is the largest Asian market for imported wine, it is still only around two litres per person per year. This compares with over 50 litres in France and is only around 50% of the global average. This all means that in order to cover their fixed costs, importers, retailers and restauranters have to add a high margin at each stage of the chain - some admittedly more than others (although we are not accusing anyone of a champagne charlie lifestyle).
Time then to change all that - but it take two to tango and we need your help
1. We either buy directly either from importers or import ourselves, store in our temperature controlled warehouse facilities until the wines are at optimal drinking point and bring to you directly.
2. We don't care about cosmetic imperfections and nor should you Call us controversial, but we think that the actual wine itself is the most important aspect of a bottle so we don’t mind if there happens to have a soiled label. We're not saying that we are a wine equivalent of the Hospital for the Ruptured and Crippled but we certainly don't turn them away.
3. Every Yen spent on the construction industry is in our book one Yen more on the bottle of wine so we have rolled up our sleeves and fitted out much of this beautiful restaurant ourselves using as much recycled material as possible. We are rather pleased with the overall effect. We hope that you agree. May this be a template for a more sustainable Japan.
4. And so we come to our Faustian pact with you the drinker: you drink without moderation, we keep margins within (and vice-versa).
