March 29, 2007 / 9:32 AM / 11 years ago

Japan supermarket chain resumes sales of U.S. beef

TOKYO, March 29 (Reuters) - A Tokyo supermarket on Thursday became the first major Japanese outlet to resume sales of U.S. beef since a ban was lifted last summer, and one of its first customers was the U.S. ambassador to Japan.

The United States has exported beef to Japan since a ban imposed due to mad cow concerns was lifted in July 2006, but sales have been sluggish due in part to trade restrictions and consumer concerns about food safety.

“I’ve been waiting all week to come out here,” U.S. Ambassador Thomas Schieffer said at a Seiyu Ltd. 8268.T store in downtown Tokyo.

The resumption of sales came a day after U.S. President George W. Bush told American ranchers that Japan, once its top export market for beef, and South Korea should fully open their markets to U.S. beef.

Bush’s remarks fueled the view that beef would again be a hot topic at a meeting expected to take place between the U.S. president and his Japanese counterpart, Shinzo Abe, in late April or early May.

Chief Cabinet Secretary Yasuhisa Shiozaki told a news conference, “There has been no formal decision on what will be on the agenda (at the meeting between Abe and Bush).”

Japan, which banned imports of U.S. beef in December 2003 after the discovery of the first U.S. case of mad cow disease, agreed to allow imports of U.S. beef from cattle aged up to 20 months. Young cattle are believed to be less likely to develop the brain-wasting disease, known as bovine spongiform encephalopathy.

Washington is demanding that the age limit be raised to 30 months.

Schieffer steered clear of any politically tinged remarks on Thursday as he bought two packages of U.S. steak, saying he had promised his wife to bring some home.

From Saturday, 19 other Seiyu outlets in the Tokyo area will also offer U.S. beef.

THE OTHERS

It remains to be seen whether other major supermarket chains will take their cues from Seiyu, which is owned 53 percent by Wal-Mart Stores Inc. (WMT.N).

Seiyu’s much bigger rivals such as Aeon (8267.T) and Daiei 8263.T, which aim to create the country’s biggest retail group, have no immediate plans to resume sales of U.S. beef. Ito-Yokado, part of Seven & I Holdings (3382.T), also said it was watching developments.

Seiyu, which runs about 400 stores, said it would decide whether to expand the number of outlets that offer U.S. beef, now purchased from Kansas-based Creekstone Farms, after it sees how well the meat sells.

Schieffer said he was confident Seiyu would enjoy brisk sales and inspire other supermarket operators to follow suit.

“In another three or four weeks I think you’ll see other supermarkets marketing U.S. beef,” he said.

U.S. steak was selling for 298 yen per 100 grams ($11.50 a pound), which Seiyu said was similar to the price of comparable beef from Australia, which has come to dominate the Japanese export beef market in the absence of U.S. beef.

This compares with Japanese domestic wagyu steak which sells for about 1,380 yen per 100 grams, with the more expensive cuts, wrapped individually, priced at 1,780 yen.

U.S. beef has made a slow return to the Japanese market because of the limited supply of meat that qualifies under the age and other guidelines.

A report by a U.S. agricultural attache in Tokyo said last week that U.S. beef sales to Japan are forecast at 57,000 tonnes, a fraction of the 240,000 tonnes exported to Japan in 2003.

One development that is likely to work to the United States’ advantage is a preliminary ruling by the World Organisation for Animal Health earlier this month that described the United States as a “controlled risk” country for mad cow disease.

The United States is expected to use the organisation’s ruling as leverage to press Japan to fully open its market.

(Additional reporting by Chisa Fujioka)

((Editing by Mike Miller; Reuters Messaging: miho.yoshikawa.reuters.com@reuters.net; +81-3 5473-3706; miho.yoshikawa@reuters.com))

($1=117.03 Yen) Keywords: JAPAN USA/BEEF

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