A new Wholesale Market Law for fresh produce has come into effect since April 2009. This makes wholesale markets more competitive in terms of their service and commission, and brings changes to the traditional methods of transactions and distribution of cut flowers in Japan.
After the revision of the law wholesale markets and retailers will become more approachable if they are ready to deal with foreign suppliers.
It is predicted that more and more small-sized wholesale markets will be merged under large central wholesale markets under the new law increasing the use of electronic-based services and transactions.The new Wholesale Market Law sees:
An upgrade of quality control. Wholesalers will introduce better quality control methods.
Deregulation of the rule of ‘co-occurrence of payment and delivery’. This means flowers can be directly delivered to the customer from supplier/importer while payment is processed through the wholesale market.
Liberalisation of purchasing and consolidation. This enables the wholesale market to handle both types of flowers: those received ‘on consignment basis from supplier/importer’ and ‘purchased from supplier/importer’.
Wholesaler’s being able to sell directly to third parties and intermediate wholesaler’s being able to purchase directly from suppliers/importers. Under the previous law, flowers were sold using an ordered process:
1) Grower/supplier/importer
2) Wholesaler (= auction house)
3) Intermediate wholesaler (or retailer who holds the right/licence to purchase from 2)
4) Retailer (who doesn’t hold the right/licence to purchase from 2.)
After the revision of the law, flowers can be sold from 2 to 4, also from 1 to 3. (1 to 4 is ok under the current law regardless of the revision as it is ‘outside of wholesale market distribution’.)
Flexibility in the wholesale markets’ commission. Under the previous law auction houses charge about 10 per cent in commission. After the revision of the law, auction houses are free to set the commission rate – this could mean it is reduced to become more competitive or increased with the addition of other services.
Less restrictions on the services wholesalers can provide, clear financial standards for intermediate wholesalers, and transparency across the wholesale market’s transaction history.
(Source: Ministry of Agriculture, Fishery, and Forestry Japan - MAFF)
