Tuesday, Jan. 24, 2006

By TAIGA URANAKA and MAYUMI NEGISHI

Staff writers

The renewed ban on U.S. beef imports hit Yoshinoya D&C Co. on Monday, with Yoshinoya shares going limit down to 173,000 yen before ending at 189,000 yen, a 2,400 yen drop from Friday.

U.S. Deputy Secretary of State Robert Zoellick (left), in Japan to discuss the new ban on U.S. beef, poses for cameras Monday with Chief Cabinet Secretary Shinzo Abe at the Prime Minister's Official Residence.

Other "gyudon" (beef-on-rice bowl) restaurant providers, meanwhile, suffered hits as well, but not to the extent of Yoshinoya.

Yoshinoya's share price drop highlights the down side to owning a strong and popular brand.

Yoshinoya's gyudon -- a cheap staple of the deflationary age, as wages for many salaried workers continue to shrink -- has a fervent following unlikely to forgive Yoshinoya if it "changes" its gyudon.

Or so says Susumu Wada, a 33-year-old systems programmer ordering a pork and kimchi bowl at a Yoshinoya in Minato Ward, Tokyo.

"People know what Yoshinoya gyudon is supposed to taste like," he said. "It's a very subtle flavor -- I think I'd be disappointed if (Yoshinoya's) gyudon came back different."

Perhaps not all customers are as conservative as Wada, but corporate executives at Yoshinoya have learned the hard way to respect the views of gyudon fans.

The firm went effectively bankrupt in 1980 after it changed the taste of its top beef bowl dish -- in a cost-cutting effort -- and customers stayed away in droves.

Asked about the possibility of Yoshinoya importing beef from other countries, Yoshinoya spokesman Haruhiko Kizu said, "Absolutely not."

The ban on U.S. beef forced Yoshinoya to take gyudon off its menu in 2004. The mainstay item was supposed to come back next month, after the two-year-old ban came to an end in December.

The ban, in place after one cow tested positive for mad cow disease in the U.S., was lifted for a month and then slapped back in place last week after some high-risk, prohibited spinal cord parts were found in a shipment from the U.S.

Yoshinoya has said it is difficult to provide the same standard throughout Japan's largest gyudon chain without a supply of U.S. beef. Other gyudon providers, however, say they need to make little or no adjustment to their strategies.

When Japan resumed U.S. beef imports a month ago, Matsuya Foods Co. said it intended to look at price, quality and volume of U.S. imports coming into Japan.

In 2004, it resumed its original dishes of "gyu-meshi," Matsuya's version of gyudon, using beef from China. The price now is at 350 yen per regular bowl, a slight increase from the 290 yen it used to offer with U.S. beef.

"We wanted to answer our customers' demand for their favorite dish," said Motoki Ishimura, manager of Matsuya's public relations and investor relations group. The overriding priority was to resume gyudon dishes at as close to the original price as possible.

"That's possible, now that we have secured stable supply routes in China," he said.

Fast food chain Zensho Co., which operates the Sukiya and Nakau chains, has made a point of announcing it does not intend to use U.S. beef until the U.S. can secure "the same level of safety as in domestic beef."

"Our customers support our stance," said a Zensho spokesman.

For its gyudon, Zensho uses Australian beef. "We do not think of our gyudon now as the same product -- they are a completely new product, and its flavor and price are popular."

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