Japan beer majors raided over cartel allegations

Japan beer majors raided over cartel allegations

Four major Japanese beer makers have been raided by the Japan Fair Trade Commission, JFTC. They are suspected of violating the country's antimonopoly law. Regularly held backdoor meetings between company representatives are believed to have coordinated price increases. The allegations surfaced amid soaring consumer prices.

The JFTC has initiated a criminal investigation against the four beer manufacturers: Asahi Breweries, Kirin Brewery, Sapporo Breweries and Suntory Spirits.It is treating the incident as malicious and as a serious anti-trust violation that has a significant impact on people's lives. Investigative sources say the four companies are suspected of having formed a cartel to fix the scale and timing of price hikes for their shipments to wholesalers.Higher wholesale prices impact the consumer through higher retail prices. The public is voicing disappointment over the incident.

One consumer says she feels betrayed that agreements may have been reached behind closed doors without consumers' knowledge.

A supermarket official says he feels angry about the allegations at a time when they are working hard to make products more affordable.

How were prices likely adjusted?

First administrative criminal probe targeting beverages

This latest action is called a "criminal investigation conducted by an administrative agency."Unlike an ordinary on-site inspection, investigators are allowed to conduct searches and seize evidence.The investigation is being carried out with a possible criminal referral to the Prosecutor-General in mind.A similar investigation was conducted in September last year over a suspected cartel involving diesel fuel sales. This is the first time, however, such an investigation has been carried out over food or beverage products.

Secretary General of the Fair Trade Commission Iwanari Hiroo says prices are one of the most important ways companies compete. He added, for now, their priority is to do everything they can to establish the facts of the case.

Kobayashi Wataru, a special visiting professor at Doshisha University Law School, thinks the authorities decided on the simultaneous searches partly because beer is closely tied to consumers' daily lives and because the suspected conduct may have continued for a long period.He says assuming that prices can simply be raised if everyone in the industry does it together is far too simplistic. He added such conduct is a serious problem because it prevents the market mechanism from working properly.