Would you look at that, another price increase.
Rise in Production Costs
On Wednesday (22 June), Calbee announced that they were raising the prices of snacks and cereals in Japan by 5% to 20% from September onwards due to increasing material costs.
Besides the worldwide phenomenon of having to pay more for food because of soaring energy prices and shortages in certain grains, Japan had a bad potato harvest this year and the material costs are increasing.
As a matter of fact, this isn’t the first time this year that Calbee has raised their prices because of similar reasons. They have also cut down the bag sizes in an attempt to reduce costs.
The company is well known for its grand line-up of products which ranges from pizza-flavoured potato chips to low-carb granolas.
For chip lovers, this is probably really bad news, because it means you have to cut down on your consumption.
However, that’s not the end.
The company also mentioned that its limited-edition snacks that are sold as regional souvenirs such as their octopus-ball flavoured potato sticks in Osaka or taco-rice flavoured chip, which was created with a popular dish in mind in southernmost Okinawa, is likely to become more expensive as well, come this fall.
The Economy of Japan
For Singapore, we are merely importers and consumers of these snacks, and they are non-essentials in our basket of goods.
Whereas for Japan, the increasing food prices is terrible for the citizens, as the price hikes of everything from beers to burgers is hard for households surviving on stagnant wages.
Additionally, while global inflation is at an all-time high, the yen’s value is sliding down further, reaching a 24-year-low against the US dollar.
This is worsening the price pressures for the resource-poor archipelago, which is heavily dependent on imports for energy and food.
Food is becoming more expensive, but the consumers’ purchasing power is decreasing due to the yen’s devaluation, and they aren’t even earning more to keep up with the inflation.
The cycle of prolonged stagnation and deflation, which first began in the 1980s when the asset bubble in Japan burst, is still continuing to the present day.
For all these reasons, Japan’s recovery from the pandemic is significantly weaker than other countries.
Other snack companies like Koike-ya are similarly helpless to the external circumstances, as they have also declared that they will be increasing the prices of their popular spicy and sour products in September.
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Featured Image: Shutterstock / Morumotto
DPM Lawrence Wong has just spoken about his plan for Singapore in the next ten years and more. Here’s a summary of his first speech: