Japanese government holds 'coffee morning' to persuade cosmetic businesses to reduce prices

20-Nov-2014 - Last updated on 19-Nov-2014 at 16:20 GMT

As part of its efforts to persuade Japanese businesses to slash product prices due to the falling Japanese yen, the Ministry of Economic Affairs (MOEA) invited companies 'for a cup of coffee' to talk about special discounts and promotions.

As the Japanese yen depreciated 5.17% against the dollar, the government sent out its fifth invitation to importers of Japanese cosmetics distributors, among other consumer goods sectors, to attend its coffee morning.

Of which, a total of 19 representatives attended.

According to the China Post, most who attended the meeting supported the government's plan to roll out special discounts and promotions.

MOEA's Bureau of Foreign Trade Deputy Director-General David Hsu informed the publication that major cosmetics stores like Kiss Me, Medical Japan and Shiseido will continue their discount measures and introduce new offers along with local department stores' annual sales.

They also plan to roll out other promotions, vouchers, lucky draws and gift bags.

Cosmetics store 'Domohorn Wrinkle' however, declined to attend the government's invitation, stating that they had attended such a meeting in September and that it was “inappropriate” to have coffee meetings with such frequency.

Taxes on cosmetics also cut to cash in on growing tourism

The government also announced that from October, certain cosmetics purchases will be tax-free for foreigners visiting the country, in a move that aims to increase tourist spending in the country.

The tax-free items will also include confectionery and health care products.

Foreign tourists can have consumption tax refunded on purchases up to ¥5,000 ($48) at designated tax-free shops on the provision they provide their passports.

The move comes after the government increased consumption tax rate from 5% to 8% in April of this year, which led to a big hike in consumption by Japanese consumers to beat the higher tax rate in the first quarter of the year.

Now it wants to counterbalance the subsequent dip in sales by capitalising on the huge growth in tourist numbers, which has come about thanks to the lower exchange rate of the Japanese Yen against foreign currencies.

The Japan National Tourist Organization says 6.26 million tourists visited Japan during the first half of 2014, 26.4% ahead of figures for the same period last year – with 2013 already a record breaking year itself.