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June 24, 2017

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MOEA hosts negotiations for Japanese importers

TAIPEI, Taiwan -- Following the recent devaluation of the yen, the government yesterday invited importers of Japanese goods to negotiate price reductions for their products.

Present at the meeting were officials of the Ministry of Economic Affairs (MOEA, 經濟部), and major importers of Japanese automobiles, cosmetics, electronics and clothing.

The importers signed a joint statement expressing willingness to cooperate with government policies to facilitate price stabilization and stimulate consumer spending. The document is not binding however, with the MOEA expressing respect for each importer's decision.

According to sources close to the department store industry, cosmetic products from Japanese brands such as Shiseido, Kose, and SK-II are poised to increase their prices by as much as 7 percent, starkly in contrast with the wishes of consumer advocates and the government. Whether this trend will continue for new Japanese cosmetic products launching this year remains to be seen.

The prices for 60 to 70 of Shiseido's staple cosmetic products are set to be increased by 3.9 percent, with the price of its higher end products to remain relatively unchanged.

The Consumers' Foundation (消基會) similarly urged the government to investigate the price increments levied by Japanese cosmetic companies.

In response, Japanese cosmetic companies stated that their prices in Taiwan are dictated by their parent companies abroad, adding that the exchange rate plays only a small part in pricing decisions, as they have other considerations such as the costs associated with R&D, human resources and shipping.

Local distributors question the reason for the price increase, with several stating that there had been no major fluctuation in the cost of materials and no significant progress in Taiwan's average disposable income. Local distributors suspect that the reason for the price increase is to make up for last year's poor revenue.

UNIQLO, a major Japanese apparel brand, announced that it will indeed reduce its prices, with over 10 percent of its spring catalog to feature discounts of 20 to 50 percent.

However, the company's spokeswomen for its operations in Taiwan indicated that fluctuations in the currency exchange rate had little to do with the decision to reduce prices, as the company's operations are global, with all procurement orders accounted in U.S. dollars.

Hotai Motor (和泰汽車), the importer of Toyota and Lexus vehicles, pledged to initiate more promotional discounts and reduce the severity of price increases for the time being, and promised to reduce overall if the yen continues its devaluation.

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