Sushi Chain Takes $600,000 Loss On One Single Japanese Tunaff

Source: Bloomberg Business Week

A Japanese sushi chain will take a more than $600,000 loss on the most expensive fish ever sold at Tokyo’s Tsukiji market as it sells $74 pieces of tuna for $5 dollars apiece.

Kiyomura K.K. paid a record 56 million yen ($730,000) for the fish at the market’s first auction in 2012. Chefs carved it into about 10,000 pieces of sushi that were sold at the restaurants’ normal prices of between 134 yen and 418 yen instead of the 5,649 yen needed for the chain to break even.

“It is not just about the money, as there will be positive ripple effects from buying the fish,” said Hiroshi Umehara a spokesman for the chain. “It is also about the Japanese spirit.”

Foreign companies have outbid Kiyomura at the auction in the past three years, according to Umehara. Japanese eat more fish per capita than any other developed country, consuming 56.7 kilograms (128 pounds) annually, compared with a global average of 17.1 kilograms, according to the United Nation’s Food and Agriculture Organization. Fish accounts for 23 percent of protein in the daily Japanese diet, compared with four percent in the U.S.

“We really wanted to provide good tuna to the locals after losing to overseas rivals in the past three years,” said Umehara. “We don’t think this is a proper price.”

The price Kiyomura paid for the first tuna of the year, touted as an auspicious prize, also comes to 210,000 yen per kilogram, compared with the 14,962 yen per kilogram highest price paid for Dec. 29 and the 26,932 yen maximum on Dec. 30.

Japanese ‘Stamina’

“The purchase shows that Japanese companies still have stamina,” Masao Morita, Sony Pictures Entertainment Japan representative director, said today in Tokyo at a New Year’s party for Keidanren, the nation’s most influential business lobby. “It’s not just about the cost, it’s about added-value.”

The tuna offered at the first auction of the year over the past 15 years at the Tsukiji fish market sold for an average 11.8 million yen, according to the Tokyo Metropolitan Central Wholesale Market website. The previous record price was set last year at 32.5 million yen, the market’s data shows.

“We would definitely like to be one of the companies to be able to make such a winning bid,” Takeshi Niinami, president of Lawson Inc., Japan’s second-biggest convenience store chain, said at the Keidanren event.

4 a.m. Fish Market

Tsukiji is listed among Japan’s most popular attractions by the Japan National Tourism Organization. An estimated 500 visitors a day gather as early as 4 a.m. at the market to observe tuna auctions, where buyers use hand signals to bid for fish that are later sliced with meter-long carbon-steel knives. Tsukiji, the size of 43 football fields, is crammed with stalls selling giant crabs, bright red octopus, and fugu, a type of blow fish that is deadly if incorrectly prepared.

Tokyo boasts the most Michelin stars of any city in the world, with more of the coveted awards than Paris and New York combined. At Sushiyabashi Jiro, which has three stars, a course can cost more 35,000 yen ($460).