The Great Japan Potato Chip Crisis of 2017

piza potato
Look good, don’t they? Yeah, well…read on before you get too excited.

Headed to Japan? If so, stuff a bunch of potato chips in your luggage and prepare to score a sweet price on the black market, because the little deep-fried bastards are quickly disappearing from local retailer’s shelves.

Being an island nation, Japan sometimes experiences weird shortages due to a combination of agricultural snafus and voodoo economics. In 2015 and 2016, housewives across the nation found themselves under butter rations [Japanese] brought about by a general decline in production combined with the effects of the devastating tsunami (東日本大震災; higashi nihon daishinsai, or The Great Eastern Japanese Earthquake). There was also an element of protectionism: the Japanese government, afraid of cannibalizing native butter production, limited the amount it imported to the minimum volume possible.

This year’s potato chip shortage has a much more straightforward cause: a series of four typhoons that hit land last year in Hokkaidou (北海道), the northern island of Japan – and home to 80% of the country’s potato production. This devastating blow has led Calbee (カルビー), which produces 70% of the nation’s chippies, to cease sales until conditions improve [Japanese]. Bad news for the Japanese economy and for Calbee, but good news for the country’s waistline, I suppose.

Calbee has been producing potato chips in Japan since 1975, and is largely responsible for the product’s success in Japan. Since that time, as shopping consultant Satou Masashi (佐藤昌司) notes, the price of chips has not really grown with inflation, making them an economical staple of Japanese junk food diet for decades. With the end of the potato shortage, will Calbee take the opportunity to jack up prices? Satou notes that both Calbee and chocolate manufacturer Morinaga has both done this before (Morinaga in 2014 after chocolate bean prices skyrocketed). However:

カルビーは今回、ポテトチップスの一時休売を決めました。販売再開は今のところ未定です。2007年の規格改定と同じく、原料のジャガイモの不足が理由です。一方、物価は安定的で消費者の可処分所得は増えているとは言い難い状況にあります。大幅な値上げは受け入れられないといえるでしょう。

For the time being, Calbee has decided to stop the sale of potato chips. There is no date set for resumption of sales. As with the [price] revision that occurred in 2007, a potato shortage is the cause. But we’re in a period where it’s hard to say that consumer’s discretionary income is rising. It’s possible that consumers won’t accept a drastic price increase.

In other words, given the still struggling state of the Japanese economy and the lack of increase in discretionary spending, potato chips and cheap beer may still have a bright future in Japan.

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