Japan's Seven & I says to enter agri-business

TOKYO, June 19 (Reuters) - Japan's top retailer Seven & I Holdings 3382.T said on Thursday it would start farming to sell vegetables at its Ito-Yokado stores in response to shoppers' increasing consciousness of food safety.

Japanese consumers’ yearning for domestically produced goods has intensified after a food scare earlier this year involving pesticide-contaminated dumplings imported from China.

“Most of the vegetables we sell are already Japan-made, but our customers’ needs are shifting more and more towards domestically produced goods, so we are responding to that,” a Seven & I spokesman said.

“We have been selling vegetables produced by contract farmers, but we have judged that we can ensure safety more by going one step further into production and supply ourselves,” he said.

Seven & I operates about 180 Ito-Yokado stores in Japan, generating annual fresh food sales of around 100 billion yen ($927 million). The scale of its agri-business would be one of the biggest by a corporation, according to the Nikkei business daily.

Seven & I plans to start farming from summer and will eventually set up 10 farming firms across the country.

It could also expand the sale of the vegetables to group companies in the future, including Seven-Eleven convenience stores and Denny’s restaurants, the spokesman said. ($1=107.85 yen) (Reporting by Sachi Izumi; Editing by Ben Tan)