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NEW YORK TIMES


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In sake, Japan sees a potential stimulus

By New York Times

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NIHONMATSU, Japan » As Japan confronts troubling economic data and memories of its stagnant "lost generation," the country's government is offering a little something to take the edge off: a bottle or two of sake.

Around the country at international airports, the government is helping to fund tasting booths where travelers can sample sake, an alcoholic brew made from fermented rice. On a recent morning, an attendant at a booth at Narita Airport near Tokyo explained that most high-quality sake is intended to be drunk slightly chilled — not heated, as lower-grade sake is sometimes offered at restaurants outside Japan.

The program, set to run at least until March, is part of a broader push by the government to bring the country's cultural products to the world — and in doing so, hopefully, give a little lift to Japan's export economy. A government-financed program called Cool Japan looks to champion the country's softer goods, like animi, music, fashion, food and drink. In December, Japan secured "intangible cultural heritage" status for its traditional cuisine, known as "washoku," from UNESCO.

Japan has been taking a broad approach to reviving its moribund economy. In the face of persistent deflation, Prime Minister Shinzo Abe has introduced his "three arrows": fiscal stimulus, monetary easing and structural reform.

Sake and other softer goods are hardly going to fill the gap left by an erosion in core industries like electronics. But the government appears to be working on the assumption that every bit counts. In the case of sake and other rice-based products, the government hopes to increase exports fivefold by 2020, to a value of 60 billion yen, or $590 million.

"Until the current government, hardly anything was done to promote sake," said Hideharu Ohta, chief executive of Daishichi Sake Brewery in Nihonmatsu, a small town in Fukushima prefecture. "The government concentrated on electronics and cars, and lowering tariffs for those things."

Sake plays an important role in the culinary traditions of Japan, where it takes center stage in holiday toasts and is consumed by enthusiasts at izakayas, hole-in-the-wall bars. Yet consumption has fallen sharply over the past few decades, as many drinkers have switched to wine, much of it imported, or other domestic drinks like beer, whiskey or shochu.

Two decades of deflation and an aging population have caused a major problem for the domestic market. As a result, makers of alcoholic drinks have joined a rush of Japanese companies looking to do more business abroad. Suntory, the Japanese beer brewer and whiskey distiller, recently agreed to buy Beam Inc., the U.S. maker of Jim Beam bourbon and other spirits, for $13.6 billion.

But sake producers lack the deep pockets of corporate giants like Suntory. The industry is highly fragmented, with hundreds of small, mostly family-owned producers dotting the countryside, from the island of Hokkaido in the north to Kyushu in the south. Daishichi is one of a handful of sake producers that still uses a time-consuming, laborious, traditional method called kimoto.

With its artisan appeal, the company has managed to break into upmarket food shops like Le Bon Marchi in Paris. Even so, Daishichi exports only about 3 percent of its production, about 50 percent above than the national average.

In 2012, overall exports of Japanese sake totaled 8.9 billion yen, or about $87 million at current exchange rates, according to the National Tax Agency. While that was up from 7.5 billion yen a decade earlier, it is a tiny fraction of the 5.6 billion euros, or $7.7 billion, worth of wine France exported in 2012.

Sake producers in Fukushima are suffering even more than their peers elsewhere in Japan, rocked not just by the downturn in domestic consumption but also by fears over safety, after the accident at the Fukushima Daiichi nuclear power plant in March 2011. Some Japanese retailers have taken Fukushima sake off their shelves to avoid alarming their customers. China and South Korea do not allow imports of sake and other agricultural produce from the prefecture, citing health concerns.

The government faces a battle as it tries to appeal to palates outside Japan. The United States accounted for more than one-third of Japanese sake exports in 2012. But it has not caught on in a big way anywhere else.

One reason is price. With transport costs and import duties, sake can cost two to three times more overseas. Japanese negotiators have reportedly pushed sake into talks on the Trans-Pacific Partnership, a proposed trade agreement that would cut tariffs on a variety of goods.

Another problem is confusion. Many sake labels are indecipherable to non-Japanese speakers. And much of the "sake" served in Japanese restaurants abroad is little more than cheap distilled alcohol, not the real thing. Once Westerners have been burned by this firewater, it can be difficult to convince them of the charms of real sake.

"I spend more time telling people what sake isn't than telling them what sake is," said Sylvain Hukt, a French blogger and sommelier who holds the title of sake samurai, awarded by the Japan Sake and Shochu Makers Association.

The Japan External Trade Organization, which promotes exports, says it has educational efforts coming via conferences and other marketing. The brewers' association has named, for the first time, a Miss Sake, who will travel to events like a Joy of Sake festival in Hawaii this summer.

Abe is doing his part, giving bottles of sake to President Vladimir V. Putin of Russia for his 61st birthday last year, and to President Frangois Hollande of France during a recent visit to Tokyo. The sake Abe chose, from a brewery called Asahi Shuzo, is made in his home prefecture, Yamaguchi.

Sold under the brand name Dassai, it is also from one of the few producers that has managed to buck the downturn in sales at home and to break into export markets. Asahi Shuzo exports about $3 million worth of sake yearly, or 8 percent of its production, to about 20 countries, according to Kazuhiro Sakurai, a vice president at the brewer. The company wants to raise that to 50 percent over the next 10 years, he said. To support the export push, the brewery plans to open a shop in Paris this summer.

Ohta of Daishichi, whose company has been making sake for nearly three centuries and exporting it for three decades, knows selling abroad is not easy. He says producers should take a long-term view, like the French wine chateaus that have found export success by playing up their history and ties to the land.

"We don't want to make concessions or to make a sake that would be easier for people abroad to drink," he said. "We want to make the products we are proud of in Japan."

Eric Pfanner and Zhiyi Yang, New York Times






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