TT-693 -- Bonsoy Class Action in Australia, ebiz news in Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, Jan 13, 2013, Issue No. 693

+++ INDEX

- What's New -- Bonsoy Class Action in Australia
- News -- High-end taxes going up
- Upcoming Events
- Corrections/Feedback
- News Credits

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+++ WHAT'S NEW

Sometimes an event pops up which is a classic sign of our times. Such is a little publicized class action court case going on in the Supreme Court in Victoria, Australia, which may have long-term ramifications for smaller Japanese health food exporters. The case is being prosecuted on the behalf of over 600 claimants and revolves around a soy milk product called Bonsoy, which is produced for Australian company Spiral Foods by Marusan-ai of Aichi-ken.

The action comes from the fact that in 2003 Spiral Foods asked Marusan-ai to reformulate its exported soy milk to replace ordinary salt with Konbu as a salt alternative. No doubt Spiral Foods thought this would be healthier, but neither they nor Marusan-ai, nor their middleman trading company Muso Corp., bothered to check the safety of the formulation after making the switch. Then, in 2006 a test in Japan was done on Bonsoy, which found the product to have 30mg of iodine per liter, which is at least 100 times the U.S. recommended daily allowance for adults.

Around this time and over the next 3 years, Spiral Foods received a number of inquiries from concerned users, but only in 2009 did they finally pull the product and reformulate again, this time without the konbu. As a result, the law suit claims that Spiral foods, Marusan-ai, and Muso jointly neglected to act in a timely manner on information that their product had excessive levels of iodine, and thus caused many consumers to get sick with overactive thyroids.

[Continued below...]

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[...Article continues]

Before we move on to what the implications of this law suit will be, the question might be asked: is konbu and for that matter taking large doses of iodine safe or not? After all, after the Fukushima nuclear explosion, many people ordered in Potassium Iodide (KI) tablets as a precaution. They typically took 130mg per day for some weeks, so as to flood their systems with iodine and thereby prevent absorption of the radioactive kind being emitted from the power plant. Others, instead of taking KI tablets, chowed down on konbu, which in a large helping can deliver up to 10mg of iodine (although this is highly variable depending on how the Konbu is prepared).

Of course the Japanese have been eating konbu for generations, so they know a thing or two about it and iodine consumption. Up until two generations ago they were ingesting 6-8mg daily, almost as much as the Australian law suit is claiming (10-20mg) made people sick, so maybe it is this fact alone that made maker Marusan-ai complacent. Currently the average Japanese eats about 1mg-2mg of iodine daily, and even the Japanese Health Ministry sets the upper safe limit as 3mg a day, about 10 times more than the U.S. upper recommendation.

Perhaps a mitigating factor for the Japanese in terms of high iodine intake is that studies have also shown that high intakes of cruciferous vegetables inhibit the take-up of the mineral -- suggesting that so long as you are eating a whole-spectrum traditional Japanese diet (kaiwari, cabbage, various winter veges), that you can probably eat a lot more konbu/iodine than someone abroad who doesn't have the same diet.

Unfortunately for Spiral and Marusan-ai, those diet differences meant that Australian consumers taking 10mg-20mg of iodine via Bonsoy daily, as many were doing, caused hundreds of them to start getting sick, some seriously so, and being diagnosed overactive thyroids. Their symptoms ranged from hyperactivity, mood swings (such as anxiety, irritability and nervousness), insomnia, fatigue, and muscle weakness, through to diarrhoea, steatorrhoea, sensitivity to heat and excess sweating, unexplained or unexpected weight loss, infrequent or light periods, and infertility. In other words, it's a pretty long list and the effects can be debilitating.

The good news is that for most of those people affected, where the cause of these symptoms is ingestion of excess iodine alone, then stopping consumption alleviates the symptoms within 6-8 weeks. Maybe this is why Japanese doctors don't panic when they see these symptoms in a konbu-eating patient. Instead they just tell the person to cease and desist for a while.

In any case, the law firm conducting the class action, Maurice Blackburn, has a strong track record, and observers are predicting that Spiral Foods, Marusan-ai, and export firm Muso, may be in for a collective penalty of millions of dollars, plus of course very tarnished reputations. For Marusan-ai, which is a middle-size firm listed on the Nagoya stock exchange, the fines could put them out of business (although we wonder if a judgement in Australia will be enforceable in Japan?). We guess that all will be revealed mid-this year, when the Victorian Supreme Court is due to reach a decision and gives its verdict.

What this case means for Japanese food exporters, and particularly health food exporters, is that they need to remember that just because a product has been traditionally consumed in Japan without ill effects, traditions are not standards. Consumers abroad are eating these products out of context and often inappropriately, and so they need to be educated and listened to, making formula changes or issuing consumer warnings on the packaging as necessary.

Recently we heard of another (major) Japanese food products company that has had its formulated product brand on the store shelves for 60 years, without ever testing that product. They've never had a consumer complaint, and so as far as they are concerned their product is safe. But in this day and age, all food companies carrying formulated products owe it to themselves to check such formulations are safe.

Secondly, Japanese SME exporters need to understand that dealing through a trading company doesn't protect them from legal and image liabilities abroad. If they made the product and come to learn that there are questions about it, then they need to pay attention and proactively remediate the problem. In this particular case, if Marusan-ai knew in 2006 that konbu content was an issue, because after all the iodine test results came from Japan, it should have warned Spiral Foods and thus reduced its culpability.

Further, they need PR control, something that isn't happening in Australia. Instead, Marusan-ai and its trader, Muso, look negligent through inaction and the local media having now taken up the case are swaying public opinion accordingly. As a result, even if both companies survive the court fines, their market in Australia and perhaps elsewhere will be ruined for a generation.

In short, Japanese SMEs have to realize that with new export earnings comes new responsibilities.

...The information janitors/

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+++ NEWS

- Softbank to jettison eAccess shares
- First LDP fiscal stimulus is large
- High-end taxes going up
- Spotify coming to Japan
- Taiwanese bank may buy Tokyo Star Bank

=> Softbank to jettison eAccess shares

It looks like the Communications Ministry has convinced Softbank to off-load at least 67% of the shares it owns in eAccess, so as to avoid administrative action over Softbank holding more than its fair share of mobile radio frequency spectrum. Softbank is apparently going to sell the shares to Samsung, Ericsson, Orix, and 8 other companies -- who will each receive a similarly sized share. Softbank will apparently make a handy profit over the divestment. ***Ed: We find it strange that the 11 new buyers would bother with the purchase, since none of the companies will have sufficient dominance in eAccess to influence the way the company is run and therefore will be leaving minority shareholder Softbank with continued control. Maybe Softbank has offered the new partners some future business in return? Oh, to be a fly on the wall of related Softbank board meetings...** (Source: TT commentary from japantimes.co.jp, Jan 13, 2013)

http://www.japantimes.co.jp/text/nn20130113a9.html

=> First LDP fiscal stimulus is large

The new LDP cabinet has approved a new round of stimulus spending, totaling JPY20trn. Most of the money will go to construction work to beef up the country's infrastructure (whether such work is needed or not), and an extra JPY100bn for the military to spend patrolling and defending the Senkaku islands from China. This spending is just the start, apparently, and Abe has indicated that there will be a completely new budget for the fiscal year starting April. ***Ed: We expect a big blow-out budget by Abe and co., so as to help them win the Upper House election in summer. At the same time, we also expect the massive amounts being spent by the government to have little effect on the economy. Japan would need to see the yen go back to JPY120-JPY150 to the US dollar for a sustained period (several years) for the current monetary policy to really help -- hard to see the US allowing this to happen.** (Source: TT commentary from cbsnews.com, Jan 10, 2013)

http://www.cbsnews.com/8301-505123_162-57563414/japan-approves-stimulus/

=> High-end taxes going up

Following a similar trend overseas (USA and France), the LDP is apparently considering raising taxes on people earning more than JPY18m a year. The current top tax rate is 40% and this will be increasing to 45% in 2015. The new tax level will apparently increase the government's tax take by about 200bn annually. ***Ed: We see this as yet another reason foreign executives will avoid Japan and domicile in either Singapore or Hong Kong. The reality is that the government is doing this as a populist move to partially distract the public from the oncoming sales tax rise next year.** (Source: TT commentary from wsj.com, Jan 11, 2013)

http://online.wsj.com/article/SB1000142412788732408170457823330080744019...

=> Spotify coming to Japan

According to music industry website, mccluremusic.com, both Spotify and Rdio, two major international online radio subscription services, will be launching in Japan in the next few months, although they haven't said when officially. Apparently Spotify is discussing with Japanese record labels about terms and conditions for streaming their music, which after Sony would make it only the second company to offer online music on a subscription basis (versus buying the songs on iTunes or a similar service). ***Ed: This has to be bad news for radio stations, since one of Spotify's main points of focus will be reaching users who are currently downloading music with more conventional online services. Apparently mobile downloads accounted for 67.6% of Japan's total digital music sales.** (Source: TT commentary from billboard.biz, Jan 11, 2013)

http://bit.ly/UWirCB

=> Taiwanese bank may buy Tokyo Star Bank

Ever since Tokyo-based fund Advantage Partners ran out of cash in 2011 to pay interest on loans used to buy Tokyo Star Bank, the lenders have been looking for a buyer for the mid-sized bank, but without much luck. Finally, it looks like they may have a buyer in the form of Taiwanese Chinatrust Commercial Bank. According to the Nikkei, the Taiwanese proposal is for a purchase of Tokyo Star Bank's shares for around JPY50bn. ***Ed: Interesting to see the shareholders taking such a big haircut. The Financial Times said in 2011 that the shareholders were owed about JPY170bn in debt, so they appear to be getting just 30% back in this deal. Not surprising, since running a small bank profitably in Japan these days is hard work.** (Source: TT commentary from e.nikkei.com, Jan 10, 2013)

http://e.nikkei.com/e/ac/tnks/Nni20130110D1001A19.htm?GID=204

NOTE: Broken links
Some online news sources remove their articles after just a few days of posting them, thus breaking our links -- we apologize for the inconvenience.

***------------------------****-------------------------***

--------- Shojin Ryori: the real thing, in Tokyo ----------

Shojin Ryori is a unique Japanese temple vegetarian cuisine colloquially called “monks’ food”. The Dewa Sanzan variant is known for using vegetables found in the nearby Shonai Plain and wild mushrooms and vegetables picked on the slopes of the sacred Mount Gassan. The meals are served to pilgrims at the temple lodgings in Toge Village, which lies at the foot of Mount Haguro, one of the other three sacred mountains of Dewa (Dewa Sanzan).

Now, Dewa Sanzan's “yamabushi” (mountain priests) have decided to travel from Yamagata to Tokyo to introduce their cuisine to the foreign community here, with a limited-seating sampling of dishes, teas, local sake, and some local entertainment -- all absolutely free (first registered, first in). One day only. This is a unique culinary and cultural experience.

Schedule: Saturday, February 9th, 13:30-15:30
Venue: Neuro Cafe (www.neuro-cafe.com/), Jingumae
Fee: Free (incl. sampling meals, herbal tea,local sake)
Location: 2F, Jingu-mae 2-13-2, Shibuya-ku, Tokyo
Nearest Stn: JR Chuo/Sobu Line Sendagaya (9min walk)/Metro Ginza Line Gaien-mae (7min walk)

For more information: http://japantourist.jp/view/dewa-sanzan-shojin-ryori
To register: Email info@cradle-ds.jp.
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+++ CANDIDATE ROUND UP/VACANCIES

=> BiOS, a Division of the LINC Media group, is actively marketing the following positions for customers setting up or expanding in Japan, as well as other employers of bilinguals.

** HIGHLIGHTED POSITION

BiOS is urgently looking for a Network Engineer to join our client in Tokyo, a major Japanese internet hosting company that has expanded abroad and needs to support their datacenters at home and in English-speaking countries overseas. The successful candidate will be responsible for supporting networks for 3 datacenter sites, providing network and server support for Japan (layer-2 and -3, Unix and Linux), as well as providing remote support for offshore sites. In addition to being the escalation point for unresolvable issues offshore, you would be responsible for “smarthands” remote instruction of English-speaking engineers at the overseas sites.

Due to the technical nature and demanding work environment, this position is suitable for someone with at least three years of experience as a Network Engineer with good communication and trouble-shooting skills. In addition, since this role requires direct coordination with both regional and global IT teams, Fluent-level English and Japanese are required.

Remuneration is negotiable depending on your experience and skill level.

** POSITIONS VACANT

- Server Engineer, major Japanese online company, negotiable
- Software Asset Management Officer, global bank, negotiable
- MAC Coordinator, global IT hardware and services provider, negotiable
- Service Delivery Manager (Data Center), large data center services provider, negotiable
- Staffing Consultant, IT services provider, negotiable

** BiOS Job Mail

Every 2 weeks BiOS sends out a regular communication to its job seeking candidates, called BiOS Job Mail. Every edition carries a list of BiOS's current and most up-to-date vacancies, with each entry featuring a short job description and a direct link to the main entry on the BiOS home page. Regardless of whether you are unemployed and searching, thinking about a career change, or just curious to know if there is something out there that might suit you better, the BiOS Job Mail newsletter is an easy and convenient way for you to stay informed. If you would like to register for the BiOS Job Mail, or to find out more, please email jason.kisling@biosjp.com.

Interested individuals may e-mail resumes to: jason.kisling@biosjp.com and check out the BiOS web page for other jobs: http://www.biosjp.com/positions.php
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***------------------------****-------------------------***

+++ UPCOMING EVENTS/ANNOUNCEMENTS

----------------- ICA Event February 21 ------------------

Speaker: Gen Utsumi, Head of Sales & Business Development APAC for smartTrade Technologies.

Title: "The Reality of Electronic FX Trading" Details: Complete event details at http://www.icajapan.jp/

Date: Thursday, February 21, 2013
Time: 6:30 Doors open, Buffet Dinner included and cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members) Open to all. No sign ups at the door!!!!!!!
RSVP: RSVP by 5pm on Friday, February 15th
Venue is The Foreign Correspondents' Club of Japan
http://www.fccj.or.jp/aboutus/map
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Entrepreneur's Handbook Seminar 9th of February, 2013

If you have been considering setting up your own company, find out what it takes to make it successful. Terrie Lloyd, founder of over 17 start-up companies in Japan, will be giving an English-language seminar and Q&A on starting up a company in Japan.

This is an ideal opportunity to find out what is involved, and to ask specific questions that are not normally answered in business books. All materials are in English and are Japan-focused.

For more details: http://www.japaninc.com/entrepreneur_handbook_seminar
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------------------ Prestigious Writing Prize --------------

The Japan - U.S. Innovation Award Program , which is produced by the Japan Society of Northern California in cooperation with Stanford's US-Asia Technology Management Center, is opening up a new award category this year: the "Untold Story in Innovation" Award.

This will go to the author of a previously unpublished story of intrapreneurial innovation inside a company (probably a large company) that has relevance to Japan - U.S. business. This award is aimed at professional or part-time journalists and other researchers/writers.

The award is for an English language piece of journalism. There will be one winning author, who will receive a $3,000 cash prize. We will also recognize two Award Alternates, who will each receive a $1,000 cash prize. Although the cash prizes will only go to the winning
authors, the innovators and companies featured in their stories will also be named as recipients of the honor.

The first step is to send in a "pitch" proposal to the Subcommittee for this Untold Story award, namely:

Richard Dasher
Dana Lewis
Andrew Neuman
with cc to John Thomas

Deadline for the pitch is January 31, 2013. PLEASE REFER TO the attached document for details on what to include in the pitch, etc. If you have further questions, please contact Prof. Richard Dasher or Ms. Dana Lewis .
-----------------------------------------------------------

---------------- Share House Near Ikebukuro ---------------

There are gaijin share houses, and those that you share with others on a casual basis, but none has the facilities and amenities of this new-to-market offering in Oizumigakuen. Large 4-bedroom house with large yard, share kitchen-living-dining rooms, and with your own large bedroom. Available for short and long-term tenants. Just JPY50,000/month. Includes share of internet connection.

Only 20 minutes by train from Shibuya/Ikebukuro.

Contact the owner at hatanokawakatsu@yahoo.com
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***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted by readers. We encourage you to spot our mistakes and amplify our points, by email, to editors@terrie.com.

=> No corrections or comments this week.

***------------------------****-------------------------***

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+++ ABOUT US

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