Japan FTC reveals firms rejecting price hikes by suppliers

The Yomiuri Shimbun
The Fair Trade Commission / The Public Prosecutors Office. in Chiyoda-ku, Tokyo, Japan, February 6, 2022.

TOKYO (Jiji Press) — Japan’s Fair Trade Commission on Tuesday published the names of 13 organizations that refused to accept price increases by suppliers over surging materials and labor costs.

The antitrust watchdog urged the 13 organizations to improve their actions, after they kept prices intact without negotiations with suppliers.

The 13 organizations include Sagawa Express Co., the National Federation of Agricultural Cooperative Associations, or Zen-Noh, Denso Corp. and Toyota Industries Corp. .

The move by the FTC follows an emergency investigation that the agency conducted on whether suppliers were able to pass on rising costs to larger clients, as part of efforts by the government to help small businesses secure funding to raise wages.

None of the 13 organizations were accused of violating law. Publishing their names is intended to have them hold talks with suppliers on prices.

The document-based investigation covered about 80,000 suppliers and about 30,000 clients between June and December. The FTC conducted some on-site investigations.

The probe found that, in addition to the 13 published groups, 4,030 organizations were found to have engaged in action possibly amounting to abuse of a superior bargaining position under the antimonopoly law, such as not responding to calls for price increase talks. The FTC sent written warnings to them.

The FTC clarified in February situations in which companies could be deemed as abusing superior bargaining positions regarding talks on reflecting rising costs in prices. It raised examples such as keeping prices unchanged without holding talks and maintaining prices despite price hike demands by not responding in writing.

The survey found that there were more firms that kept prices fixed without holding talks than there were those that kept prices fixed despite hike demands. It pointed to the possibility that suppliers may be unable to seek price increases over fears that business dealings will be reduced or halted.