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					I – 14 Processed Tomato Products                                                                                            Food
1. Definition of Category
            Processed food products and beverages whose primary ingredients are tomatoes.
               HS Numbers                                      Commodity
               2002.10-000                                     Prepared Product (Whole or in Pieces)
               2002.90-100, -211, -219, -221, -229, -290       Tomato Puree, Paste and others
               2009.50-100, -200                               Tomato Juice
               2009.90-210, -220                               Mixtures of Vegetable Juice
               2103.20-010                                     Tomato Ketchup
               2103.20-090                                     Tomato Sauce

2. Import Trends

  (1) Recent Trends in Processed Tomato Product Imports
          In 1999, total imports of processed tomato products up 13.3%, to 193,082 tons. Among these, imports of
       tomato puree and tomato paste increased 19.4%, to 98,794 tons. Tomato ketchup imports decreased by
       12.4% to 8,074 tons.
          A look at trends in imports in the medium term shows that imports of processed tomato products have
       been steadily rising in recent years. By product, tomato puree and tomato paste account for 50 to 60% of the
       imports with the remainder consisting of tomato ketchup, tomato juice, etc. The liberalization of tomato
       puree and tomato paste in 1972 led to a drop in domestic production of processing use tomatoes and a
       decline in production of fresh tomato juice using domestic ingredients (fresh tomato directly juiced). At the
       present time, the majority of the processed tomato products are made using imported intermediate
       ingredients such as tomato puree and tomato paste.
          Japan lowered the tariff rates on processed tomato products starting April 1, 1995 as agreed at the
       Uruguay Round.
                                            Japan’s Processed Tomato Product Imports




                                        1995                  1996                 1997                 1998                 1999
                                 Volume      Value      Volume     Value     Volume     Value     Volume     Value     Volume     Value
Tomato Puree and Paste             93,236      8,340      77,442     8,142     77,522     8,085     82,726     9,213     98,794    10,124
Tomato Ketchup                     13,245      1,173      14,123     1,354     11,716     1,197      9,213       946      8,074       722
Tomato Sauce                         (509)         75        591       106        809       166        723       153        550       100
Other Prepared Product             45,498      4,192      56,472     5,795     61,454     6,706     71,972     7,765     81,358     7,438
Tomato Juice                       (3273)        413       2,088       264      1,252       179      2,032       318      1,454       193
Mixtures of Vegetable Juice       (11788)      1,194       9,169     1,189      2,319       361      3,709       612      2,853       418
Unit: Million Yen, tons or kl (inside ())                                                              Source: Japan Exports and Imports
Note: 1kl = 1ton on graph.
  (2) Imports by Place of Origin
          The top countries/regions of origin of tomato puree and tomato paste, which constitute the bulk of the
       imports, are Turkey, China, Chile, and the United States. These four countries are expected to continue to
       supply the majority of the imports in the future as well. Most tomato ketchup is imported from the United
       States. American manufacturers are strengthening their sales efforts in the Japanese market.



                                                                  - 120 -
                       Principal Exporters of Processed Tomato Products to Japan
<Tomato Puree and Paste>

                          1995       1996       1997          1998                  1999
     COUNTRY              Value      Value      Value         Value        Value           Quantity
     TURKEY                2,706     3,209      2,411         2,180        3,060           29,036
       CHINA               1,645     1,189      1,891         2,190        2,055           24,529
        USA                1,009     1,163      1,584         1,766        2,005           18,855
       CHILE               1,243     1,188      1,020         1,466        1,300           10,620
     PORTUGL                466       469        618           979         1,042           10,002
      OTHERS               1,271      923        561           631          661             5,752
       TOTAL               8,340     8,142      8,085         9,213        10,124          98,794
 Unit: Million Yen, tons                                  Source: Japan Exports and Imports


 (3) Imports’ Share in the Japanese Market
         Imports now supply virtually all of Japan’s processed tomato product needs. Nevertheless, only a small
      portion of these imports is intended for retail sale to consumers. Finished product imports have only a small
      Share in the Japanese Market in this area, about 10% in tomato ketchup and roughly 2% in tomato juice.
                                             Imports’ Share in the Japanese Market
                                                      1993              1994            1995            1996        1997
               Domestic Products                    234,763           247,408         226,976         231,605     241,557
                  Tomato Puree and Paste             7,560              7,189           6,912          7,516       8,112
                  Tomato Juice                       65,613            69,458          61,839         65,464      69,468
                  Tomato Ketchup                    105,681           102,825         103,309         106,101     106,187
                  Others                            55,909            67,936          54,916          52,524      57,790
               Imports                              118,352           134,820         167,548         159,556     155,073
               Share of Imports                      33.5%             35.3%           42.5%           40.8%       39.1%
             Unit: tons                                                 Source: Ministry of Agriculture, Forestry, and Fishers

3. The Importing and Distribution Process

 (1) Regulations and Procedures at the Time of Import
         Importation of processed tomato products is subject to provisions of the Law designed to assure the health
      and safety of food.
         Importers must submit a “Notification Form for Importation of Foods, etc.” to the Quarantine Station at
      the port of entry. Documents will be examined with respect to the following:
         (1) decontamination, time and temperature during the manufacturing process
         (2) raw materials
         (3) compliance with materials standards for synthetic resin containers, if used
         (4) labeling and
         (5) for juice products, compliance with ingredient standards for soft drinks.
         An inspection is also conducted.
         Prior to importing, the importer may take a sample of forthcoming imports to a testing laboratory
      designated by the Minister of Health and Welfare. Those test results may be substituted for the
      corresponding inspection at the port of entry, which expedites the quarantine clearance process, so
      administrative procedures can be completed more quickly.




                                                                 - 121 -
(2) Regulations and Procedures at the Time of Sale
1) Food Sanitation Law
      Importation of packaging or containers for seaweed products is subject to labeling requirements of this
   Law.
                               Inspections Required by the Food Sanitation Law
          "Notification Form for Importation of Foods, etc."


                       Document Examination



     Inspection Not Required                  Inspection Required


                                             Inspection Conducted



                                   If Approved                      If Not Approved

                                                                                      (Submit Return or
                                                                     Returned or      Disposal Plan)
                                                                      Discarded
                                                                                      (Submit Return or
                    Customs Clearance                                                 Disposal Report)
                                                                Process Complete

2) Law Concerning Standardization and Proper Labeling of Agricultural and Forestry Products (JAS Law)
       The Law defines JAS standards for specified processed tomato products. JAS standards consist of i)
   scope of applicability, ii) definitions, iii) standards (for shape, wrapping, content volume, etc.) and iv)
   measurement methods. Products that pass JAS standards compliance testing by registered grading
   organizations (or by an office of local government or the Ministry of Agriculture, Forestry and Fisheries)
   may display the JAS Mark on the labels. However, it is up to the manufacturer or importer to seek such
   compliance testing. Products may be distributed and sold without the JAS Mark.
       Japan has established a system of factory certification in order to simplify the standards compliance
   process. Overseas manufacturers may also participate in this system. They may also submit products for
   testing to certain overseas registered grading organizations designated by the Minister of Agriculture,
   Forestry and Fisheries. These test results may also be used to obtain permission to display the JAS Mark.
       Furthermore, to enable consumers to readily discern the quality of the products they purchase; certain
   specified processed tomato products are subject to product quality labeling standards established under the
   Law. (JAS standards exist for tomato puree and tomato paste, but there are no quality labeling standards for
   these products. For more information, please refer to 4. Labeling Procedures below.)
3) Measurement Law
      Sealed wrapping materials or other containers for items specified by cabinet order are required to list the
   content volume and the name and address of the manufacturer (or importer). The law also requires the
   labeling of the net content to certain accuracy (range of error specified by Cabinet Ordinance). Tomato
   ketchup, tomato puree, tomato paste and tomato juice are subject to this requirement.
4) Fair Trade Code under the Act Against Unjustifiable Premiums and Misleading Representation (Voluntary
   Standard)
      The Fair Trade Code Concerning Restriction on Premium Offers for the Business of Processed Tomato
   Products prohibits the offering of excessive premiums to consumers or retailers in order to obtain their
   business.
      The Fair Trade Code constitutes a voluntary standard, but outsiders are also regulated by provisions of the
   Restriction on Premium Offers as promulgated by the Fair Trade Commission.
      The Fair Trade Code also sets definitions and establishes fair labeling practices for certain processed
   tomato products not covered by provisions of the JAS Law, including tomato soup and dried tomatoes.
          For more information, consult Japan Processed Tomato Product Fair Trade Council
          (Part of the Japan Tomato Processors’ Association).                            (TEL: 03-3639-9666)


                                                      - 122 -
 (3) Regulatory Agency and Organizational Contacts
         • Food Sanitation Law:
            Food Sanitation Division, Environmental Health Bureau, Ministry of Health and Welfare
                                                                                        (TEL: 03-3503-1711)
         • Law Concerning Standardization and Proper Labeling of Agricultural and Forestry :
            Standards and Labeling Division, Food and Marketing Bureau, Ministry of Agriculture, Forestry and
            Fisheries                                                                   (TEL: 03-3502-8111)
         • Measurement Law:
            Weights and Measures Office, Machinery Information Industries Bureau, Ministry of International
            Trade and Industry                                                          (TEL: 03-3501-1511)

4. Labeling Procedures

 (1) Legally Required Labeling
       Processed tomato products are subject to requirements of the Food Sanitation Law, the Law Concerning
    Standardization and Proper Labeling of Agricultural and Forestry Products (JAS Law) and the Measurement
    Law, each of which specified certain items that must appear on product labels. Although there are slight
    differences for each product category, in general labels must list the following items: product name, content
    volume, best before (date of minimum durability), preservation methods, name and address of manufacturer
    (importer), ingredients (including additives), and the country of origin if imported.
       Labels of products sold in cans with uncoated interior surfaces must list usage warnings. Labels of solid
    tomato products must indicate the form of the product. In addition, these Laws also set requirements for
    labeling of products made from tomato concentrate and for percentage juice content. Prospective importer
    should also note that the Laws establish precise standards for the use of words and phrases such as “fresh,”
    “natural,” “best quality” and “energy restorative,” among others, on product labeling.
       Please refer to the Fair Competition Code, which constitutes a voluntary industry standard, for more
    complete information about category-specific labeling requirements.

      Example Label for Tomato Sauce                        Example Label for Canned Solid Tomato Product

   Product    Name        Tomato    Sauce

   Ingredients:           Tomatoes,    venegar,   sugar,
                          salt, spices, pect in, acidic

                          matter

   Content:               300g

   Best before            12.1.199 0

   Country    of Origin   U.S.A.*
   Importer               XYZ Corp.,   Ltd.

                          ##, ZZ City, YY Prefecture




                                                             Importer       XYZ Corp.,   Ltd.

                                                                            ##, ZZ City, YY Prefecture




                                                           - 123 -
 (2) The JAS Mark (Voluntary Labeling)
          Products certified as compliant with JAS standards may display the JAS Mark on the product label.
                                           JAS Mark for Processed Tomato Products
                          (Other than Tomato Ketchup)                                 (Tomato Ketchup)




                                                                                                      Class

 (3) Beverage Can Material Labeling
         Beverages sold in steel or aluminum cans are required by the law for Promotion of Utilization of
       Recycled Resource to use one of the graphic symbols to indicate the can material.
         Symbol of aluminum can is a combination of triangular mark and Japanese words for "aluminum".
         Symbols of steel can are a combination of circular mark and Japanese words for "steel".
                                           Symbols of Aluminum Can and Steel Can
                                    Aluminum Can                                           Steel Can




                                Equilateral triangle with                             Circle with Japanese
                                Japanese characters for                               characters for “steel”
                                      “aluminum”

5. Tax Laws and Regulations

 (1) Customs Duties
                                                                                                Rate of Duty (%)
  HS No.                           Description
                                                                           General            WTO          Preferential   Temporary
2002             Tomatoes prepared or preserved otherwise than
                 by vinegar or acetic acid
       10-000    1.Tomatoes, whole or in pieces                             9.6%               9%              7.6%
                                                                                                               *Free
2002.90          2.Other
          -100   (1)Containing added sugar                                  22.4%             13.4%            13.4%
                                                                                                               *Free
                 (2)Other
                 A Tomato puree and tomato paste                                20%           16%
                   ) In airtight containers
                 Note: The goods, above mentioned, when used at a
                 bonded manufacturing ware-horse for the
                 manufacture of canned fish or shellfish for export
                 and re-exported shall be exempted from customs
                 duty in accordance with the provisions of the
                 Customs Law, Law No.61,1954




                                                                      - 124 -
         -211        - For the quantity (quota) stipulated for                                            +Free
                        manufacture of tomato ketchup and
                        other tomato sauces by a Cabinet
                        Order, on the basis of the quantity of
                        prospective domestic demand in the
                        coming fiscal year (April-March) with
                        deduction of the quantity of
                        prospective domestic production, and
                        also in consideration of international
                        market situation and other relevant
                        conditions
         -219        -Other
                  ) Other                                                        16%
         -221        -For the quantity (quota) stipulated for                                             +Free
                        manufacture of tomato ketchup and
                        other tomato sauces by a Cabinet
                        Order, on the basis of the quantity of
                        prospective domestic demand in the
                        coming fiscal year (April-March) with
                        deduction of the quantity of
                        prospective domestic production, and
                        also in consideration of international
                        market situation and other relevant
                        conditions
         -229        -Other
         -290   B Other                                                9.6%       9%              7.6%
                                                                                                  Free
2009            Fruit juices (including grapes must ) and
                vegetable juices, unfermented and not
                containing added spirit, whether or not
                containing added sugar or other sweetening
                matter
 2009.50        1.Tomato juice
        -100    (1)Containing added sugar                                  35%   29.8%
        -200    (2)Other                                                   25%   21.3%
 2009.90        2.Mixtures of juices
                (1)Mixtures of fruit juices (Containing added
                sugar)
         -210   A Not more than 10% by weight of sucrose,              10.8%     8.1%            8.1%
                naturally and artificially contained                                             *Free
         -220   B Other                                                7.2%      5.4%            5.4%
                                                                                                 *Free
         2103   Sauces and preparations therefor; mixed
                condiments and mixed seasonings; mustard
                flour and meal and prepared mustard
 2103.20        1.Tomato ketchup and other tomato sauces
        -010    (1)Tomato ketchup                                          25%   21.3%
        -090    (2)Other tomato sauces                                     20%    17%
          Notes: Refer "Customs Tariff Schedules of Japan" (published by Japan Tariff Association) etc.
                "*Free" in Preferential applicable only for developing country.
                "+Free" in Temporaryl applicable only for using for specific purpose.
  (2) Consumption Tax
          (CIF + Customs Duty) x 5%

6. Product Characteristics

  (1) Classification of Processed Tomato Products
          Processed tomato products may be broadly classified as follows based on their form and manner of use.
          1) Beverages:             Tomato juice, mixed tomato juice, tomato soup, etc.
          2) Foods:                 Tomato ketchup, tomato sauce, chili sauce, mixed tomato sauce (pizza sauce,
                                       etc.)
          3) Food Ingredients:      Tomato puree, tomato paste, solid tomatoes (canned or bottled tomatoes, whole
                                       tomatoes, stewed tomatoes), etc.
          Because of distribution considerations, fresh tomatoes for use as food are usually sold unripened. For
       processing, however, tomatoes are allowed to ripen on the vine before picking, then processed within 24
       hours. In Japan fresh tomatoes are in season from July through September, and almost all-Japanese tomatoes

                                                                 - 125 -
    go into production of fresh packed tomato juice. Most processed tomato products in Japan are made from
    imported tomato puree or tomato paste, and are manufactured year-round.
       Imports consist largely of tomato puree and tomato paste, most of which is used either directly as a food
    or as a secondary-processing ingredient in canned herring or mackerel, in meat sauces, or in tomato ketchup.
       With the increasing Westernization of Japanese culinary culture, a greater variety of tomato-based sauces
    and foods other than tomato ketchup are becoming available.
 (2) Characteristics of Products from Different Countries/Regions
        The quality of the tomatoes used to make processed tomato products makes a considerable difference in
    the quality of those products. Tomatoes are native to the dry high country along the Andes mountain range in
    South America. Today, though, tomatoes are widely grown around the Mediterranean as well as in South and
    North America. Tomato puree and tomato paste have relatively uniform product quality the world over, but
    Italian tomatoes have a reputation as being the best for bottling or caning. Tomato quality is affected greatly
    by changing weather conditions from one growing season to another. Characteristics of tomatoes from
    various countries are summarized below.
        Italy:                    The flesh is thick and soft. The taste is only slightly sour, and there are few
                                     seeds.
        U.S.A.:                   American tomatoes have tough skin but are high in fiber.
        Turkey:                   Turkish tomatoes are beautifully colored and juicy.
        Chile:                    Chilean tomatoes have a very sweet taste.

7. The Japanese Distribution System and Business Practices

 (1) Japanese Market Conditions
       The number of contracted tomato growers (See Note below) in Japan has been steadily declining. There
    are a number of reasons for this decline, including the unwillingness of younger members of farm families to
    take over farm operations, the aging of the farmer population, and the sheer strenuousness of the labor
    involved in picking and transporting tomatoes during the hottest season of the year. Many people like so-
    called fresh packed tomato juice, which is made from freshly, picked tomatoes. Practically all Japanese
    grown processing tomatoes go into making fresh packed tomato juice, but even more is required just for this
    purpose than Japan can supply. The share of products incorporating imported condensed juice has risen
    steadily.
       The market for processed tomatoes such as tomato puree/paste, tomato juice and tomato ketchup reached
    nearly 400,000 tons in 1996. Industry sources put the ratio of household use to commercial use at about 6:4.
    By product category, the leading type of finished processed tomato product is tomato ketchup, but ketchup
    sales have been declining, while demand for tomato juice peaked in 1991 and has declined since.

        Note: Tomato farmers who sign a contract agreeing to sell their entire crop to a single purchaser, typically a major food
              processor.

 (2) Distribution Channels
        Two leading food processors together command the lion’s share of the processed tomato product market.
    However, companies from the beverage industry and the food flavorings industry also have a market
    presence. The number of brands is quite large, especially when supermarket private label brands are factored
    in. Most tomato paste and tomato puree is used as a raw material for secondary food processing. A small
    amount is distributed by import trading companies direct to restaurants and other commercial user. In most
    cases, though, a Japanese manufacturer uses a processed tomato product to make some other product, which
    is then distributed, to consumers via food wholesalers. Most products for home use are sold through
    supermarkets. Tomato juice is available nowadays in an increasing number of vending machines, but it still
    enjoys far fewer fans than other beverages.




                                                          - 126 -
                          Distribution Channels of Processed Tomato Products
                                   Overseas Manufacturer



                                                     Overseas Exporter


                                                             Importer



                                               Food Processor


                                                    Primary Wholesaler


                                                   Secondary Wholesaler



                                                       Retail Store
                  Restaurants
                                     (Mass Merchandiser,Department Store,Cooperative,
                   Caterers
                                              Convenience Store,Liquor Store)


                                                  Consumer

8. After-Sales Service
       Normally after-sales service is not required. Problems with defective merchandise are handled either by
    the retail store or the manufacturer’s consumer relation’s office.

9. Related Product Categories
       Related product categories include food flavorings, canned agricultural products and juices. The
    regulatory environment is fundamentally the same for all these products as for processed tomato products.

10. Direct Imports by Individuals
       Imports in quantities appropriate to individual consumption and not intended for resale are exempt from
    requirements of the Food Sanitation Law, and may be freely imported into Japan.

11. Importer Organization and Industry Contacts
          • Japan Tomato Processors Association                                         TEL: 03-3639-9666
                                                                                        FAX: 03-3639-9669
          • Japan Sauce Industry Association                                            TEL: 03-3639-9667
                                                                                        FAX: 03-3639-9669




                                                   - 127 -

				
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