SUNTORY BEVERAGE & FOOD LIMITED 
(MT Newswires) -- Takeshi Niinami, President of Suntory, expresses that Japanese consumers are currently not confident and are worried about the future, particularly regarding the sustainability of social security and sustainable wage increases. He stresses that the key to improving consumer confidence is to continue the current trend of wage increases, which is made necessary by a major labour shortage. Large companies are therefore starting to recruit and retain talent, which means increasing salaries. Niinami is optimistic that consumers will return to buying, but more for non-luxury goods.
Suntory has increased wages by around 7%, a move that Niinami sees as an example for the food industry and a way out of deflation. He mentions a mismatch between the real economy and the stock market, and the importance of increasing returns on equity to bridge this gap. The pressure on companies to raise wages is also due to the fact that investors have driven equities to record levels.
As far as small businesses are concerned, Niinami says that they also need to increase wages, whether they are profitable or not, because they need staff. The lack of manpower is leading to bankruptcies among SMEs. In response to a question about price rises for Suntory products as a result of wage increases, Niinami is not entirely confident but sees an opportunity to raise prices before the summer, while remaining uncertain after the summer, depending on the ability to maintain inflation above 3%.
Niinami discusses the challenges of labour shortages in the semiconductor sector and proposes three solutions: extending the working age, offering more opportunities to women and welcoming more foreign workers, breaking the existing taboo. He points out that Japan is well placed for semiconductor manufacturing because of its clean water resources, but that it needs to solve its energy problems.
On the subject of the weak yen, Niinami suggests that the Bank of Japan will not relax its monetary policy much further and that the weakness of the yen will not change quickly, depending largely on the policy of the US Federal Reserve.
