1

- Food & Drink -

Trade Regulations for Export to Japan

Swedish Trade Council, Tokyo

2005, January 31

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Executive Summary

Market Analysis

Trade Regulations in Japan

Tax

Cost

Appendix

CONTENTS / AGENDA

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EXECUTIVE SUMMARY

In recent Japan, imports of Maize, Meat, Vegetables, and Alcohol beverages are getting increased although as most commonly imported products are fishery products.

There are several regulations for food importation to Japan and mandatory inspections stipulated under each regulation are required.

Food Sanitation Law should apply to overall food importation.

Specific food items and additives are subject to separate requirements regarding specifications besides Food Sanitation Law.

Some types of foods are subject to import restrictions related with the Foreign Exchange and Foreign Trade Law.

Three types of taxes are due on imported products.

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CONTENTS / AGENDA

Executive Summary

Market Analysis

Trade Regulations in Japan

Tax

Cost

Appendix

5

Food imports reached 12.4% of Japan’s total imports. Total food imports are 5.2 trillion JPY (4.31 BUSD) in 2001.

11.0

12.0

13.0

14.0

15.0

Source: Trade & Industry White Paper

Percentage of food imports in Japan’s total imports (JPY)

13.6

14.8

14.3

12.1

12.4

0

100

200

300

400

500

600

1997 1998 1999 2000 2001

Others

Tobacco

Beverages

Feed

Coffe, cocoa, tea

Vegetables

Fruit

Cereals and their preparations

Fishery products

Meat products

MOST COMMONLY IMPORTED PRODUCTS ARE FISHERY, MEAT, AND CEREALS AND THEIR PREPARATIONS.

1997 1998 1999 2000 2001

(10 BJPN)

(%)

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Most increasing imported products top 10 in recent Japan (2003)

Rank Product YOY %change

Share*

1 Transmitter, TV components 37.7 0.8

2 Petroleum 31.8 2.2

3 Crude oil 25.6 12.0

4 Diode, Transistor, other semi-conductor device

24.1 0.5

5 Helicopter, Aircraft, Rocket 23.7 0.8

6 Medicinal supplies 23.4 1.0

7 Petroleum gas, other gas hydrocarbon

22.9 5.1

8 Lump of aluminum 21.7 1.1

9 Maize 20.3 0.6

10 Car components, accessories 18.6 0.8

(%)

MAIZE MARKS NO.9 IN THE RANKING OF THE MOST INCREASING IMPORTED PRODUCTS.

*Share of total imports Source: JETRO HP ”Current Japanese Economy and Trade Statistics”

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Most increasing imported items and most decreasing imported items in recent Japan (2003)

Rank Item YOY %change

Share*

1 Maize 18.0 0.4

2 Meat 11.2 2.3

3 Vegetables 5.6 0.8

4 Alcoholic Beverages 5.4 0.5

Rank Product YOY %change

Share*

1 Shrimps -10.3 0.6

2 Fish & Shellfish -4.1 3.3

3 Wheat -3.0 0.3

Increasing Item Decreasing Item

Source: JETRO HP ”Current Japanese Economy and Trade Statistics”

(%)

*Share of total imports

MAIZE AND MEAT ARE INCREASING MORE THAN 10% YOY (2002-03).

(%)

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Executive Summary

Market Analysis

Trade Regulations in Japan

Tax

Cost

Appendix

CONTENTS / AGENDA

9

TRADE REGULATIONS FOR FOOD IMPORTATION

Source: JETRO HP ”Current Japanese Economy and Trade Statistics”

Statute Name Product Category Dept. in Charge (see Appendix1) Purpose

Food Sanitation Law

Overall foods(Agricultural products, agricultural processed products, fishery products, and livestock products)

Ministry of Health, Labour and Welfare

To prevent the sanitary harm caused by the chemicals substances residuals

The Domestic Animal Infectious Diseases Control Law

Livestock products(Animals such as the domestic animals, or these processed products)

The Animal Quarantine Station,Ministry of Agricultural, Forestry and Fisheries

To prevent invasion of the domestic animal infectious diseases in company with these commodities to Japan

Plant Protection Law

Agricultural products(Plants such as Fruits, vegetable)

The Plant Quarantine Station, Ministry of Agricultural, Forestry and Fisheries

To prevent invasion of the noxious insects in company with these plants to Japan

Customs Law Japan Customs, Ministry of Finance Japan

For the properly judgement on import

LIVESTOCK AND AGRICULTURAL PRODUCTS ARE REQUIRED TO PASS ANIMAL / PLANT QUARANTINE BESIDES FOOD SANITATION LAW.

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2. Standards for manufacturing, processing, and preparation of foods in general (exerted)

1) Foods shall not be irradiated during manufacturing or processing (except when, for the purpose of manufacturing or processing process control, the food absorption line emits 0.10 gray or less of radiation, or when other separately defined circumstances apply).

2) Foods made from raw cow’s milk or raw goat’s milk shall be either heat pasteurized to a temperature of 62 degrees Celsius for 30 minutes, or be subjected to another heat pasteurization method with the same or equivalent effectiveness. Milk added to foods or used in food preparation must be cow’s milk, special cow’s milk, pasteurized goat’s milk, partially skimmed milk, skim milk, or processed milk.

3) When blood, blood cell, or blood plasma (only of livestock) is used in the manufacture, processing, or preparation of foods, the food must be heat pasteurized to a temperature of 63 degrees Celsius for 30 minutes, or be subjected to another heat pasteurization method with the same or equivalent effectiveness.

［ THE FOOD SANITATION LAW ］

FOOD THAT FAIL TO COMPLY WITH THE FOOD SANITATION LAW MAY NOT BE IMPORTED INTO JAPAN.

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FOOD THAT FAIL TO COMPLY WITH THE FOOD SANITATION LAW MAY NOT BE IMPORTED INTO JAPAN.

3. Preservation standards for foods in general

Source: JETRO “Handbook for Imported Foods”

1) When preserving a food by direct contact with ice, ice shall be used that shows a negative response to the coliform group (the testing method for detecting coliform group is also defined).

2) Antibiotics shall not be used in food preservation.3) Foods shall not be irradiated for the purpose of preservation.

Specific food items (Appendix 1) and additives are subject to separate requirements regarding specifications of composition, bacteria count, coliform group count, preservation temperature, processing or manufacturing methods, etc.

The Ministerial Ordinance Concerning Compositional Standards etc. for Milk and Diary Products and the Specifications and Standards for Food and Food Additives, etc. is stipulated as specifications and standards on milk and diary products.

［ THE FOOD SANITATION LAW ］

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NEARLY ALL FOODS MAY BE FREELY IMPORTED WITH THE COMPLETE PROCEDURAL REQUIREMENT. SOME EXCEPTIONS ARE ・・・

1. Import quota items (Import Notice No.1)The importer must first apply to the Ministry of Economy, Trade and Industry for an import quota allocation, after which import license must be obtained.

1) Non-liberalized itemsGenerally referred to as IQ (Import Quota) items. As of April 1, 2002 there were 8 food products on HS classification basis in the Customs Tariff Schedules of Japan that were subject to import quotas.

2) Wild plant and animal species and their derivatives protected by the Washington Convention (Convention on International Trade in Endangered Species of Wild Fauna and Flora) and the products made from their species.

2. Import approval items (Import Notice No.2)

3. Prior confirmation items Some items require confirmation from the Minister of Economy, Trade and Industry prior to importation.

Source: JETRO “Handbook for Imported Foods”

Certain imported products originated in or shipped from specific areas must obtain import approval from the Minister of Economy, Trade and Industry in order to enter Japan.

［ THE FOREIGN EXCHANGE AND FOREIGN TRADE LAW ］

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Principal Quarantine and Inspection

Fruits and Vegetables

Meats and Meat Products

Fishery Products

Other Processed Foods

Animal Quarantine

Plant Quarantine

Food Sanitation Inspection

Customs Inspection

indicates required inspections

Principal Quarantine and Inspections Procedures are determined for the type of products as below.

Source: JETRO “Handbook for Imported Foods”

FOOD SANITATION INSPECTION AND CUSTOMS INSPECTION ARE MANDATORY FOR ALL FOODS IMPORTATION.

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WHAT PROCEDURES YOU SHOULD FOLLOW?Foreign Countries

Customs Inspection (Tariff Rates)

Food Sanitation Notification and Inspections

Animal Quarantine

Plant Quarantine

Time of Sale

Food Sanitation LawNutrition Improvement LawJAS LawMeasurement LawOther Laws

Processed FoodsFishery Products

FoodAdditives

Meats,Ham,Sausage

Fruits and Vegetables

Ship Aircraft

Tariff,Consumption Tax

Collected

OK

OK OK

JAPAN

Foreign Cargo

Domestic

Cargo

Cargo removed from bonded area = Imported

Source: JETRO “Handbook for Imported Foods”

15

Executive Summary

Market Analysis

Trade Regulations in Japan

Tax

Cost

Appendix

CONTENTS / AGENDA

16

THREE TYPES OF TAXES ARE DUE ON IMPORTED PRODUCTS.

1. TariffsA tariff is a tax imposed on imported products. The taxable basis is either the customs value (=the price of the food itself + insurance + freight charges) or the volume. For more complete information, consult the Customs Tariff Schedules of Japan.* The Customs Tariff Schedules of Japan is published by the Japan Tariff Association (TEL: 03-3263-7221)

Products treated as alcoholic beverages under provisions of the Liquor Tax Law are subject to liquor tax on a volume basis when imported.

Consumption tax (5%) is imposed on the sum of the customs value and any applicable tariff (or liquor taxes, in some cases).In principle, neither tariffs nor consumption tax are due when the customs value is under 10,000 yen, whether the item is being imported for business or personal purposes.* Alcoholic beverages are also exempt from tariffs and consumption tax if the value is under 10,000 yen, but they still are subject to liquor taxes.

2. Liquor Tax

3. Consumption Tax

Source: JETRO “Handbook for Imported Foods”

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Executive Summary

Market Analysis

Trade Regulations in Japan

Tax

Cost

Appendix

CONTENTS / AGENDA

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1. Freight and insurance charges

2. Cost associated with payment- Cost for transfers, L/C (Letter of Credit) and account settlement

3. Cost associated with customs clearance- It is common to use the service of a customs broker (Appendix 3) to handle procedures required at Customs. This involves the following cost items. 1) Procedural proxy services

• Food sanitation inspection procedures • Import declaration prorocedures• Animal or plant quarantine procedures (required for some items)2) Port cargo handling operations (ship unloading, landing, etc.)3) Storage facility costs, etc.

4. Import taxes (see page.18)

5. Transportation cost within Japan

Source: JETRO “Handbook for Imported Foods”

CUSTOMS BROKERS ARE COMMONLY USED FOR CUSTOMS PROCEDURES.

19

Executive Summary

Market Analysis

Trade Regulations in Japan

Tax

Cost

Appendix

CONTENTS / AGENDA

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Appendix 1 Foods with Separate Defined Standards

1. Soft drinks 9. Whale meat products 17. Cereal grains, beans, fruit, vegetables, seeds, tea, and hops

2. Powdered soft drinks 10. Fishery products (except oysters for raw consumption)

18. Bean jam for futher processing

3. Ice 11. Oysters for raw consumption 19. Soybean curd (tofu)

4. Flavored ices 12. Fish paste products 20. Instant noodles

5. Meat and whale meat (except frozen whale meat for raw consumption)

13. Salmon roe (ikura, sujiko) and cod roe (tarako)

21. Frozen foods

6. Poultry eggs 14. Boiled octopus 22. Container packaged pressure-heat pasteurized foods

7. Blood, blood cell, and blood plasma

15. Boiled crab 23. Confectionary processed with fats and oil

8. Meat products 16. Agar-agar

Source: JETRO “Handbook for Imported Foods”

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Appendix 2 Trade Regulation – Related Organization

Organization Name URL ContactE-mail / Telephone

Tokyo Quarantine Station, 1st Food Inspection Division

http://www.mhlw.go.jp/english/topics/importedfoods/index.html

81-3-3599-1520

Plant Protection Station, Ministry of Agriculture, Forestry, and Fisheries Japan

http://www.pps.go.jp/ (Yokohama PPS)yokohama@pps.go.jp81-45-211-7155

The Animal Quarantine Service, Ministry of Agriculture, Forestry, and Fisheries Japan

http://www.maff-aqs.go.jp/ http://www.maff-aqs.go.jp/

81-45-751-5921

Ministry of Health, Labour, and Welfare

http://www.mhlw.go.jp/index.html 81-3-5253-1111

Japan Customs http://www.customs.go.jp http://www.tokyo-customs.go.jp/ (Tokyo Customs)

(Tokyo Customs)81-3-3529-0700

Japan Food Additives Association

http://www.jafa.gr.jp/ 81-3-3667-2860

Source: JETRO HP ”Current Japanese Economy and Trade Statistics”

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Appendix 3 Customs Brokers AssociationOrganization Name Telephone

URLAddress

Japan Customs Brokers Association Tel: 81-3-3508-2535/6http://www.tsukangyo.or.jp

Tokyo Sakurada Bldg. 3F, 1-1-3 Nishi-Shimbashi, Minato-ku, Tokyo 105-0003

Tokyo Customs Brokers Association Tel: 81-3-3529-0728/9 Tokyo Harbor Government Bldg., 2-56 Aomi, Koto-ku, Tokyo 135-8615

Yokohama Customs Brokers Association Tel: 81-45-201-0614 http://www.y-tsukan.gr.jp

Haneda Bldg., 4-23 Kaigan-dori, Naka-ku, Yokohama 231-0002

Kobe Customs Brokers Association Tel: 81-78-331-3996 14-1 Shinko-cho, Chuo-ku, Kobe 650-0041

Osaka Customs Brokers Association Tel: 81-6-6573-3896 No.1 Osaka Port Bldg., 2-1 Chikko, Minato-ku, Osaka 552-0021

Nagoya Customs Brokers Association Tel: 81-52-661-1223 Nagoya Kowan Kaikan, 2-1-17 Irifune, Minato-ku, Nagoya 455-0032

Moji Customs Brokers Association Tel: 81-93-321-6212 Moji Harbor Government Bldg., 1-3-10 Nishi-Kaigan, Moji-ku, Kitakyushu 802-0841

Nagasaki Customs Brokers Association Tel: 81-95-820-7228 c/o Nagasaki Customs, 1-36 Dejima-machi, Nagasaki City, Nagasaki 850-0862

Hakodate Customs Brokers Association Tel: 81-138-42-5010 c/o Kyoei Unyu Co., Ltd., 22-5 Kaigan-machi, Hakodate City, Hokkaido 040-0061

Okinawa Customs Brokers Association Tel: 81-98-866-3311 Kaiho Koun Bldg., 2-15-1 Minato-machi, Naha City, Okinawa 900-0001

Source: JETRO ”Handbook for Imported Food”

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Appendix 4 Japanese Associations – Food (General)

Organization Name Telephone URL Address

The Grain Importers Association Tel: 81-3-3274-0171 Mizuho Kaikan, 2-1-16 NihonbashiChuo-ku, Tokyo 103-0027

National Federation of Food Importers Associationc/o Japan Fruit Produce Import Facilitation Association

Tel: 81-3-5833-5141 Suehiro Bldg. 6F, 1-12-16 Kanda Izumi-choChiyoda-ku, Tokyo 101-0024

Association for the Safety of Imported food, Japan

Tel: 81-3-5695-0819http://www.asif.or.jp

Earnest Bldg. 8F, 9-8 Nihonbashi Hisamatsu-cho, Chuo-ku, Tokyo 103-0005

Source: JETRO ”Handbook for Imported Food”

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Appendix 5 Japanese Associations – BeveragesOrganization Name Telephone / Fax

URLAddress

All Japan Coffee Assoc. Tel: 81-3-5649-8377Fax: 81-3-5649-8388http://coffee.ajca.or.jp

Max Bldg., 6-2 Nihonbashi HakozakichoChuo-ku, Tokyo 103-0015

Brewers Association of Japan Tel: 81-3-3561-8386Fax: 81-3-3561-8380www.brewers.or.jp

Showa Bldg., 2-8-18 KyobashiChuo-ku, Tokyo 104-0031

The Mineral Water Assoc. of Japan Tel: 81-3-3350-9100Fax: 81-3-3350-7960www.minekyo.jp

Fujiwara Bldg. 5F, 2-9-17Shinjuku-ku, Shinjuku, Tokyo 160-0022

Japan Soft Drinks Assoc. Tel: 81-3-3270-7300Fax: 81-3-3270-7306www.j-sda.or.jp

3-3-3 Nihonbashi-MuromachiChuo-ku, Tokyo 103-0022

Japan Spirits & Liquors Makers Assoc. Tel: 81-3-6202-5728Fax: 81-3-6202-5738www.winery.or.jp

2-12-7 NihonbashiChuo-ku, Tokyo 103-0025

Japan Wine & Spirit Importers Assoc. Tel: 81-3-3503-6505Fax: 81-3-3503-6504(N/A)

1-13-5 ToranomonMinato-ku, Tokyo 105-0001

Source: Promar Japan ”U.S. Food Exporter’s Guide to Japan”

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Appendix 6 Japanese Associations – DistributionOrganization Name Telephone / Fax

URLAddress

All Japan Supermarket Assoc. Tel: 81-3-3207-3157Fax: 81-3-3207-5277www.super.or.jp

Okubo Fuji Bldg., 2-7-1 OkuboShinjuku-ku, Tokyo 169-0072

Japan Chain Store Assoc. Tel: 81-3-5251-4600Fax: 81-3-5251-4601www.jcsa.gr.jp

1-21-17 ToranomonMinato-ku, Tokyo 105-0001

Japan Department Store Assoc. Tel: 81-3-3272-1666Fax: 81-3-3281-0381www.depart.or.jp

Yanagiya Bldg. 7F, 2-1-10 NihonbashiChuo-ku, Tokyo 103-0027

Japan Food Service Assoc. Tel: 81-3-5403-1060Fax: 81-3-5403-1065www.jfnet.or.jp

1-29-6 HamamatsuchoMinato-ku, Tokyo 105-0013

Japan Food Service Wholesalers Assoc. Tel: 81-3-5296-7723Fax: 81-3-3258-6367www.gaishokukyo.or.jp

2-16-18UchikandaChiyoda-ku, Tokyo 101-0047

Japan Medical Food Service Assoc. Tel: 81-3-3595-4281Fax: 81-3-3595-4282www.j-mk.or.jp

Araki Bldg. 2F, 1-5-7 NagatachoChiyoda-ku, Tokyo 100-0014

Japan Processed Foods Wholesalers Assoc. Tel: 81-3-3241-6568Fax: 81-3-3241-1469(N.A)

Edo Bldg., 2-5-11 Nihonbashi-MuromachiChuo-ku, Tokyo 102-0022

Japan Retailers Assoc. Tel: 81-3-3283-7920Fax: 81-3-3215-7698www.japan-retail.or.jp

3-2-2 Marunouchi Chiyoda-ku, Tokyo 100-0005

Source: Promar Japan ”U.S. Food Exporter’s Guide to Japan”

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Appendix 7-1 Imported foods & drink companies in JapanOrganization Name Telephone / Fax

URLAddress Category

Aquavit Japan Tel: 81-3-34084778Fax: 81-3-34084761www.aquavitjapan.commail@aquavitjapan.com

C#1201 Duo Scala1-2-13 Nishi-Azabu, Minato-ku, Tokyo 106-0031

Scandinavian food

Kawaguchi Trading Co., Ltd. Tel: 81-3-36540838Fax: 81-3-36540929http://www.kawabo.com/fwjh5964@mb.infoweb.ne.jp

2-34-3 MatsushimaEdogawa-ku, Tokyo 132-0031

Imported food (“Felix”)

Maxxium Japan K.K. Tel: 81-3-54016276Fax: 81-3-34348425

http://www.maxxium.com/_com/worldwide.asp?country=Japan

9F Atago Toyo Bldg., 1-3-4 Atago Minato-ku, Tokyo 105-0002

Imported drink (Absolut vodka)

Minoya, K.K. Tel: 81-3-38734111Fax: 81-3-38730023

3-41-8 AsakusaTaito-kuTokyo 111-0032

Imported alcohol beverage (Absolut vodka)

Muromachi Technos K.K. Tel: 81-3-32417192Fax: 81-3-32310715www.murotec.co.jpkaigai@murotec.co.jp

4-2-1, Muromachi, Nihonbashi Chuo-ku, Tokyo 103-0022

Imported alcohol beverage (Akvavit vodka, liquors)

Source: STC Tokyo database

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Appendix 7-2 Imported foods & drink companies in JapanOrganization Name Telephone / Fax

URLAddress Category

Nacx Nakamura Corporation Tel: 81-78 3605556Fax: 81-78 3605570

Harborland Daiyanissay Bldg. 17F, 1-7-4 Higashikawasaki-cho Chuo-ku, Kobe 650-0044

Frozen food (bread of Hatting)

Nacx Nakamura Corporation Tel: 81-3-54421633Fax: 81-3-54421218www.nacx.co.jpnaka-n@nacx.co.jp

Shiba Tokyo Kaijo Bldg. 3F, 2-3-3 Shiba Minato-ku, Tokyo 105-0014

Frozen food (bread of Hatting)

Scandi Food (mail order only)

Tel: 81-3-55653165Fax: 81-3-55653040www.scandifood.cominfo-jp@scandifood.com

C/O Stolt Cocoon, Tsukiji Kaneko Bldg. 6F., 6-16-1 Tsukiji Chuo-ku, 104-0045

Scandinavian food

ERG Promotion,YG Tel: 81-3-5604 0621Fax: 81-3-5604 3660http://www.nexcite-japan.com/hanbai-nex.html

Frontier One 6F, 7-22-6 Arakawa Arakawa-ku, Tokyo 116-0002

Beauty, healthcare ("Nexcite")

Erina Co., Inc. Tel: 81-3-34435381 Gotenyama Trust Tower 11F, 4-7-35 Kita Shinagawa, Shinagawa-ku, Tokyo 140-0001

Beauty, healthcare goods

Ryoka Japan Limited Tel: 81-3-37675351Fax: 81-3-37675350http://www.ryoka-japan.co.jp/index.phptrade@ryoka-japan.co.jp

Tokyo Ryutsu Center Bldg. 4F, 6-1-1, Heiwajima, Ota-ku, Tokyo 143-6543

Imported food, confectioneries

Source: STC Tokyo database

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Appendix 8 Swedish restaurants in JapanRestaurant Name Telephone / Fax

URL / E-mail Address

ALLT GOTT Tel: 81-422 212338Fax: 81-422 212338

Shibata Bldg 2F2-28-1 Hon-cho, Kichijoji, Musashino-shi, Tokyo 180-0004

Restaurant Lilla Dalarna Tel: 81-3-3478 4690Fax: 81-3-3478 4690

5-9-19 Roppongi, Minato-ku, Tokyo 106-0032

Restaurant Stockholm Tel: 81-3-35091677Fax: 81-3-35091699www.stockholm.co.jpstockholm@e-tcom.com

Akasaka Tokyu Plaza 1F, 2-14-3 Nagata-cho, Chiyoda-ku, Tokyo 100-0014

Scanditaste.com(A division of Sweden Food and Forestry K.K.)

Tel: 81-3-3560 3170Fax: 81-3-3560 3169www.scanditaste.cominfo@scanditaste.com

Top Azabu-dai Bldg.,1-9-18 Azabu-dai,Minato-ku, Tokyo 106-0041

Source: STC Tokyo database