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32 Ornament Fishes

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					                                                                                                                    Ornament Fishes


III                                   32.                      Ornament Fishes

1. Definition of Category
   The category of ornamental fish is broadly divided into the subcategories carp and goldfish on the one
  hand and tropical fish on the other.
       HS Numbers                       Commodity
       0301.10-010                      Carp and gold fish
       0301.10-020                      Other (tropical fish)

2. Import Trends
 (1) Recent Trends in Ornamental Fish Imports
       Most carp and goldfish sold in Japan are grown in Japan. In fact, Japan is a net exporter of these va-
     rieties of fish. There was a brief fad for “ranchu” and other exotic goldfish imported from Southeast
     Asia and Hong Kong. After rising sharply in early 1990, imports of carp and goldfish have fallen
     abruptly. In recent years, however, there have been signs of recovery. In 2000, compared to the previous
     year, imports of carp and gold fish increased 32.4%, to ¥49 million.
       With regard to imports of tropical fish, this sector has shown a steady increase since 1988. In 1997,
     however, imports of tropical fish declined sharply. The market for tropical fish had expanded due to the
     ornamental fish boom, which includes the market for food and related products. Recently, the boom
     seems to have ended with consumers showing less interest in ornamental fish. In 2000, tropical fish
     imports dropped 12.9%, to ¥34.9 billion, for the fourth straight year of decline.
                                         Fig. 1 Trends in ornamental fish imports
                                      (¥ million)                                                 (tons)

                                       10,000                                                      600
                                                    (Volume)

                                         8,000                                                     500
                                                                                                   400
                                         6,000
                                                    (Value)                                        300
                                         4,000
                                                                                                   200
                                         2,000                                                     100
                                              0                                                    0
                                                     1996      1997    1998    1999        2000
                                      1996                1997                1998                 1999                2000
                               Volume Value         Volume Value        Volume Value         Volume Value Volume            Value
     Carp and gold fish              2        17         2        22         2        27          3        37         5         49
     Other (tropical fish)         518     8,021       400     6,360       292     5,123        251     4,011      232       3,494
           TOTAL                   519     8,038       402     6,382       294     5,150        254     4,047      237       3,543
              Units: tons, ¥ million                                                          Source: Japan Exports and Imports

 (2) Imports by Place of Origin
       The leading exporters of carp and goldfish to Japan are Hong Kong, China and the United States, but
     total imports were very small for each, with great fluctuations from year to year. In 2000 imports from
     China accounted for 74.9% of total volume, followed by Hong Kong (12.6%).
       In contrast, more than 40 different countries from all over the world export some 4,000 to 5,000 varie-
     ties of tropical fish to Japan. From Asia and Southeast Asia the leading exporters include Singapore,
     Indonesia, Malaysia, Thailand and Hong Kong. From the Western Hemisphere, the leading exporters
     include the United States, Brazil and Peru. Remaining exporters are scattered across Europe, Oceania,
     the Middle East and Africa.
       Imports of high unit priced discus are mainly imported from Hong Kong and Western countries. They
     have superior technology and supply other high class fish. At the same time, these countries are serving
     as transfer points for shipments from South America, Africa and the Middle East. In recent times there
     has been an increase in imports to Japan from South America, Africa and the Middle East shipped by
     direct air flights.

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        A number of exporter nations are in tight competition for import share in tropical fish. The leading
       exporters to Japan in 2000 were Singapore, Brazil and Indonesia, as shown in Fig. 2 below.
                                   Fig. 2 Principal exporters of ornamental fish to Japan
      Trends in import volume by leading exporters                 Shares of ornamental fish imports in 2000 (value basis)
            (tons)
            140
            120                                                                            Other   Singapore
                                                                                           26.0%     17.2%
            100
                                                                                                         Brazil
             80                                                                                          13.9%
             60                                            Singapore      Hong Kong
                                                           Indonesia        7.3%
             40                                            Brazil
             20                                            U.S.A.                 U.S.A.                    Indonesia
                                                           Hong Kong              9.0%                        13.7%
               0                                                                             Malaysia
                     1996   1997     1998   1999    2000                                      12.9%
                                1996      1997      1998            1999                          2000
                               Volume    Volume    Volume     Volume     Value         Volume               Value
            Singapore             116        82        59         49        669        48   20.2%         608     17.2%
            Indonesia               80       61        48         46        562        44   18.5%         487     13.7%
            Brazil                  37       35        27         32        540        30   12.5%         491     13.9%
            U.S.A.                  62       45        28         24        445        18     7.7%        320      9.0%
            Hong Kong               56       35        23         18        329        16     6.6%        258      7.3%
            Others                168       144       109         84      1,502        82   34.5%       1,379     38.9%
               TOTAL              519       402       294        254      4,047       237 100.0%        3,543    100.0%
                (E U)               21       12          7         6        188         7     2.8%        147      4.1%
               Units : tons, ¥ million                                                    Source: Japan Exports and Imports

  (3) Imports’ Market Share in Japan
        As discussed previously, Japan imports only very small quantities of carp and goldfish. The Japanese
      market in these fish is virtually monopolized by Japanese products.
        In contrast, industry sources estimate that 95% of all tropical fish sold in Japan are imported. Tropical
      fish may be broadly classified into fresh water and salt water species. More than two-thirds of all tropi-
      cal fish sold in Japan are fresh water species, while less than one-third are salt water species.
        The remaining 5% of tropical fish on the market are produced domestically. Most of those are sold for
      cros sbreeding and species improvement in Japan. Imported guppies are inexpensive but often lack the
      colors and patterns that are most popular with consumers. Some consumers have taken to crossbreeding
      imported guppies with Japanese guppies in an effort to get more pleasing and interesting colors and
      patterns. There is no official statistical data about the market for tropical fish. The figures above men-
      tioned are based on estimation by the industry.

3. Key Considerations related to Importing
  (1) Regulations and Procedural Requireme nts at the Time of Importation
        The import of ornamental fish is restricted by the Foreign Exchange and Foreign Trade Law based on
      the Washington Convention (Convention on International Trade in Endangered Species of Wild Fauna
      and Flora, so-called CITES).
   1) Foreign Exchange and Foreign Trade Law
           International trafficking in certain species of tropical fish is restricted or prohibited by terms of
         the Law (example : Scleropages formosus, etc.). Under terms of the Washington Convention, the
         Foreign Exchange and Foreign Trade Law regulates importing of species of wild fauna and flora
         listed in the Appendix to the Convention. It applies to three categories of species. For example,
         Scleropages formosus is classified under Appendix I of the Convention, which means that the
         capture or transfer of this species for commercial purposes is severely restricted.
           Exports of Indonesian ornamental fish fall under Appendix II of the Convention if under certain
         yearly limits. They may be imported into Japan with export permits from the Indonesian govern-
         ment. For details on the restrictions under this law, contact the Trade Licensing Division, Trade
         and Economic Cooperation Bureau, Ministry of Economy, Trade and Industry.


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 (2) Regulations and Procedural Requirements at the Time of Sale
      The sale of some ornamental fish is subject to provisions of the Law for Conservation of Endangered
     Species of Wild Fauna and Flora.
  1) Law for Conservation of Endangered Species of Wild Fauna and Flora
         The Law established a comprehensive legal framework of protection for species considered to be
       in danger of extinction. The capture or transfer of designated flora or fauna is in principle prohib-
       ited except when approved for the purpose of scientific research and the preservation of the species.
       There are however separate provisions such as individual registration, approval, registration of
       businesses, etc. for registered species. For more details, consult with the Nature Conservation B  u-
       reau, Ministry of Environment.

 (3) Competent Agencies
     • Foreign Exchange and Foreign Trade Law (Washington Convention)
         Trade Licensing Division, Trade and Economic Cooperation Bureau, Ministry of Economy, Trade and Industry
                                                        TEL: 03-3501-1511                           http://www.meti.go.jp

     • Law for Conservation of Endangered Species of Wild Fauna and Flora
         Division of Park Facilities and Conservation Technology , Nature Conservation Bureau, Ministry of Environment
                                                        TEL: 03-3581-3351                           http://www.env.go.jp

4. Labeling
   There are no labeling requirements that apply to the importation or sale of ornament fish.

5. Taxes
 (1) Customs Duties
      The following table presents the tariff rates eligible for ornamental fish.
                                          Fig. 3 Custom duties on ornament fish
                                                                                                        Rate of Duty (%)
        HS No.                               Description
                                                                                      General          WTO        Preferential         Temporary
     0301             Live fish
     0301.10          1. Ornamental fish
             -010     (1) Carp and gold-fish                                           5%             3.50%
             -020     (2) Other ornamental fish                                      2.50%            1.70%              Free
     Note: Refer to “Customs Tariff Schedules of Japan” (published by Japan Tariff Association) etc. for interpretation of tariff table.

 (2) Consumption Tax
      (CIF + Customs duty) x 5%

6. Product Characteristics
    Tropical fish may be broadly classified into fresh water species, which live in the rivers and lakes of
  tropical areas of Southeast Asia and South America, and salt water species, which live in ocean waters.
         Tropical Fish                1) Fresh water species; neon, angelfish, guppies, etc.
                                      2) Salt water species: butterfly fish, marine angelfish, etc.

    Fresh water tropic fish are known for their vivid colors and their unusual physical adaptations. Taxo-
  nomically they are similar to carp, loaches and catfish, and the number of similar species is actually sur-
  prisingly large. The fact is, though, that many species prized as ornamental fish in Japan are regarded as
  edible by indigenous peoples where those species live. Japanese people tend to be fond of fish as well, and
  in recent years the development of high performance breeding equipment has made it easier to breed tropi-
  cal fish than ever before. Consequently, demand for fresh water tropical fish is growing at a startling pace.
    Salt water tropical fish are very difficult to catch, so the absolute number of imports is rather small. Even
  so, their rarity serves to heighten their popularity among tropical fish fanatics. Ordinary households, how-
  ever, often find it problematic to regulate water content and temperature properly, so for most people it is
  rather difficult to raise and care for salt water species.




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  (1) Characteristics of Products from Different Countries / Regions
      Hong Kong and Singapore
          Most imports consist of (cultivated) fresh water species, with only a small volume of salt water
          species. In recent years Singapore has concentrated on cultivation of Scleropages formosus, and
          in position to provide consistent supplies at set quantity levels. The government of Singapore has
          targeted tropical fish exporting as a key export industry. Singapore hosted an international pro-
          motional symposium for Southeast Asia (Thailand, Malaysia and Singapore), and it has also set
          export promotion delegations to Japan.
      Thailand
          Most imports consist of inland fresh water tropical fish, 95% of which are cultivated. Thailand is
          well-known for discus fish cultivation. Vietnam also ships some tropical fish to Japan, though in
          very small numbers.
      The Philippines
          Most imports consist of salt water species. Until recently Filipino fishermen used electrical stun
          guns and toxic emissions to yield random catches, but shrinking resources and concerns about
                                                                                                r
          damage to the environment led the Filipino government to impose controls on t opical fish
          catching methods. As a result, industry sources say, importers are increasingly shifting to Indo-
          nesia, Thailand and Singapore as suppliers.
      Indonesia
          Most imports consist of fresh water species. Indonesia has found success in cultivation of (third
          generation crossbred) Scleropages formosus, the capture of which is prohibited by the Washing-
          ton Convention, and these fish are shipped under permit from the Indonesian government. Im-
          ports of Scleropages formosus come from Indonesia, Singapore, and Malaysia, at an annual rate
          of 15,000 organisms.
      Australia and New Zealand
          The Oceania region tends to be highly environmentally conscious, and quarantine procedures are
          very strict. Consequently, it is difficult to catch inland fresh water tropical fish, and most exports
          are systematically cultivated. Cultivated Australian scleropages has been rather popular in Japan
          of late. Those who catch tropical fish for export must obtain an export certificate from the gov-
          ernment.
      Germany/United Kingdom
          Germany’s advanced breeding technology enables it to produce highly prized and more expen-
          sive varieties of fish. Most imports consist of (cultivated) fresh water tropical fish. Frankfurt and
          London also serve as flight transfer points for exports from Africa. In many cases German and
          U.K. growers’ work to improve the condition of fish received from Africa before shipping them
          to Japan.
      United States
          Most imports consist of captured salt water and fresh water species.
      South America
          Many imports come from the Amazon River basin regions of Brazil, Colombia and Peru. In the
          past many imports passed through the United States or Europe on the way to Japan, but recently
          higher priced fish have been shipped direct to Japan by air freight. However, environmental con-
          cerns have led these countries to limit fish catches and restrict the sale and export of these
          species.
      Africa
          Exotic species of fresh water fish sometimes are imported from Kenya and Ghana, though small
          in volume.
      Middle East
          Many imports consist of farmed carp from Israel, the Nile River and the Nile Delta region. The
          Red Sea area also features a number of exotic tropical fish, most of which are salt water species.




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7. Domestic Distribution System and Business Practices
 (1) Domestic Market Conditions
       The raising of tropical fish first became popular during colonial times in 19th Century England, Ger-
     many, Holland and France. Tropical fish raising is said to have begun in Japan in the late 1920s with
     fish brought back from the United States. Since that time there have been a number of tropical fish fad
     periods, followed by periods of decline during sour economic conditions.
       Some leading home center chains have moved into the ornamental fish business and started selling
     tropical fish food and fish tanks as well as tropical fish. The availability of reasonably priced tropical
     fish in large volume and the appearance of convenient tools for raising ornamental fish allowed many
     people without experience to raise tropical fish relatively easily. But many fish raised by these people
     died due to the lack of information provided by retailers to inexperienced consumers. Specialized re-
     tailers as deterrent factors for market growth pointed out insufficient customer supports offered by these
     home centers.

 (2) Distribution Channels
       Specialty importers in the Tokyo and Osaka areas import most tropical fish. The fish are distributed
     through regional wholesalers to retail outlets. Some importers also act as wholesalers and distribute di-
     rect to retailers. Some larger retail stores also act as secondary wholesalers, distributing under contract
     to smaller stores in their areas.
       Earlier, the number of tropical fish shops increased as general pet shops, home centers, DIY shops and
     other mass sales retailers began selling tropical fish, establishing special corners to sell tropical fish and
     related items. Recently the boom has almost ended. Many of these new entrants have been forced to
     reduce sales corners for tropical fish while maintaining the size of their sales floors for related products.
     The specialty shops still are strong in sales of live fish with the ratio of sales between mass merchan-
     dises and specialty shops being about 3 to 7. When it comes to equipment, however, it is conversely the
     mass merchandisers that are stronger by 6 to 4.
       Some banks, department stores and other businesses rent tropical fish and aquariums, with rental pro-
     viders offering fish, circulation and other peripheral equipment, fish feeding and other forms of periodic
     maintenance. Many larger (specialty) retailers are now offering this sort of rental service.
                                    Fig. 4 Distribution channels for tropical fish

                          Tropical fish catchers                         Overseas breeders                 Domestic producers




                                                                    Importer / Wholesaler




                                                                                 Regional wholesalers




                                       Specialties stores          Department stores           Pet shops        Mass merchandisers,
                                                                                                                  Discount stores,
                                                                                                                Do-It-Yourself stores




                        Aquariums                  Industry trade show                 Consumers



 (3) Key Considerations for entering the Japanese Market
       In almost all cases, new market entrants decide to open up a specialty store in response to some sort of
     fad. Only then do they realize the amount of business risk involved with trading in living creatures. Of-
     ten new stores run into an unexpected abundance of problems when they try to import and sell exotic
     fish. To have any chance of succeeding, new market entrants need to thoroughly understand the bio-
     logical needs and proper care of ornamental fish. They have to make sure the fish are shipped promptly
     and kept in proper containers, and they have to take into account that invariably some fish will perish in
     transit.


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         It is possible to bring ornamental fish into Japan from abroad as part of one’s carry-on luggage as long
       as proper water quality, oxygenation and temperature conditions can be maintained. However, in recent
       years some international air carriers have begun refusing to allow passengers to bring exotic animals on
       board as carry-on luggage due to environmental protection concerns. Therefore, anyone planning to use
       this method to import ornamental fish should make sure in advance that the airline of choice will permit
       it.

 8. After-Sales Service
     Since ornamental fish are living creatures, they do not require after -sales service in the usual sense.
   However, retail stores often provide care instructions and sales and repairs of aquariums and other periph-
   eral equipment. In some cases equipment makers provide warranty repair service while any warranty is in
   effect. Note that since the enforcement of the Product Liability Law, there has been a marked improvement
   in after-sales service from the manufacturers.

 9. Related Product Categories
   <Aquatic Plants, Starfish and Other Peripheral Plants and Animals>
         Imports of fresh water aquatic plants (dicotyledons, monocotyledons, gymnosperms) must first un-
       dergo plant quarantine procedures at the Plant Protec tion Station at the port of entry. However, fresh
       water algae are exempt from plant quarantine requirements. Sand imports are unrestricted so long as
       there is no organic materials admixed. However, if plants (aquatic plants) are present in the sand it will
       be classified as “soil” for regulatory purposes, and thus prohibited from being imported into Japan.
         Salt water algae, starfish, crocodiles, sea anemones and live coral are not classified as either animals
       or plants for quarantine purposes, and are not subject to any import restrictions. There are restrictions
       on imports of coral (rock coral and angular coral), however, under the Washington Convention.
   <Animals Kept and Raised as Household Pets>
     • Birds
          Imports have increased in recent times of strikingly colorful birds such as parakeets, macaws and
          canaries. Canaries and other bird species are subject to animal quarantine procedures as required
          by the Domestic Animal Infectious Diseases Control Law. Also, in order to prevent the spread of
          psittacosis, the Japanese government requires that a Certificate of Administration of Antibiotics
          accompany imported macaws. The importation, sale or transfer of some birds is also prohibited
          by provisions variously of the Washington Convention, the Law Concerning Wild Life Protec-
          tion and Hunting, the Law Relating to the Regulation of Transfer of Special Birds and Related
          Legislations, and other statutory and regulatory provisions. Prospective importers need to make
          sure the organism they plan to import is not subject to these restrictions.
       • Insects
          Insect imports are subject to provisions of the Plant Protection Law, which prohibits the importa-
          tion of any insect species that is harmful to plant life. For more information, first determine the
          correct scientific name of the species and then check with the nearest Plant Protection Station.
       • Amphibians and reptiles
          Owning amphibians or reptiles has become more popular of late. However, the importation of
          some species is restricted or prohibited outright by the Washington Convention. In addition,
          some species are subject to owner registration requirements of the Law for the Conservation of
          Endangered Species of Wild Fauna and Flora after reaching Japan, and some are subject to re-
          strictions on ownership imposed by local animal c     ontrol ordinances. Prospective purchasers
          should check carefully about these regulatory provisions in advance.

10. Direct Imports by Individuals
    Individuals may freely import ornamental fish into Japan unless the fish are subject to provisions of the
   Washington Convention.

11. Related Organizations
   • Japan Aquarium Fish Association              TEL: 03-5678-6780        http://www.jafa -net.org/about_us.html
   • Japan Ornamental Fish Trade Association      TEL: 03-3757-2321
   • Tokyo Fresh Water Fish Hatchery and Fishery Cooperative
                                                  TEL: 03-3687-2448

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