TOKYO, Sept. 8, 2023—A top Japanese food catering service has failed to continue providing school lunch to schools near Mt. Fuji and elsewhere and meal services to businesses as its CEO blames on soaring food material, fuel, and labor costs, the rises that are sparked by prime minister Fumio Kishida’s ‘New Capitalism’ economic policy and the Ukraine war.
On Sept. 5, 2023, the Shizuoka Prefecture Education Commission reported that the prefecture had lost contact with HoYu Co. of Hiroshima, the food catering service contracted with the prefecture, and that the company began failing to provide school lunch to five schools from early September. More than 1,000 students and teachers were affected, the prefecture said.
HoYu also has been failing to deliver school lunch to Hiroshima-based public schools, and the prefecture government filed for penalty for violating a contract existing between the two parties, according to news reports. HoYu’s meal un-delivery problem also is hitting schools and other public entities in Miyazaki and other parts of Japan, the reports said. Altogether, schools and others in as many as 12 prefectures (out of 51 Japanese regions) were affected.
HoYu CEO Yoshi Yamaura Sept. 5 told reporters at the company’s headquarters in Hiroshima that of the 150 catering kitchens it operates in Japan, half had suspended operations. He argued that the company’s finances had deteriorated because of soaring material prices, fuel costs, labor, which it could not charge to recipients. Yamaura said he had requested recipients to agree to raise contract prices to reflect spiraling costs but was turned down.
Yamaura said he was processing to file for bankruptcy soon. Credit researcher Teikoku Data Bank estimated HoYu’s liabilities at 1.670 billion yen ($11 million).
Whether HoYu’s problem will be an isolated case has yet to be known. Some news outlets said Yamaura is ‘stingy’ and that has led to his company’s failure as the number of customers failed to grow as he envisioned.
Surging cost: Undeniable is that in Japan, prices and costs are spiraling upward almost at untenable pace in lockstep with rising grocery prices, fuels, and labor plus labor shortages, while the country’s per capital GDP has been slipping steadily, falling to 20th in 2021 as labor productivity in nominal terms has been flat since 2005, according to government reports and data.
The school and other facility meal service business condition is becoming even more difficult, observed Tokyo Shoko Research, a corporate business analysis agency, Feb. 8. While ‘large’ meal delivery companies with paid-up capital more than 100 million yen reported sales growth rise of 2.7 percent in 2022, income (profit) shrank 18.7 percent, it said. One near fatal impact on meal catering services, regardless of size, the agency said is that the government pulled off COVID-19 subsidies given them during the years until last year.
This would mean more catering service failures ahead.
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