Kitoku Shinryo Issues Unusual Statement: 'We Have Not Engaged in Unfair Price Manipulation,' Following Remarks by Agriculture Minister Koizumi

On June 11, 2025, Kitoku Shinryo, the largest rice wholesaler, issued an unusual statement from its president, asserting that there has been 'absolutely no unfair price manipulation or obstruction of distribution.' This follows remarks made in the Diet by Minister of Agriculture, Forestry and Fisheries Shinjiro Koizumi, who claimed that 'wholesalers' operating profits are up 500% year-on-year,' which fueled intense criticism against wholesalers. This statement serves as a fact-based rebuttal and an attempt to fulfill accountability through transparent business operations. Meanwhile, the question of who should be held responsible for policy formulation has also emerged as a point of contention.

The Ripples Caused by Agriculture Minister Shinjiro Koizumi's Remarks

On June 5, 2025, during a Diet session, Minister of Agriculture, Forestry and Fisheries Shinjiro Koizumi pointed out in relation to the soaring price of rice that 'the operating profit of a certain wholesaler is up 500% year-on-year.' Although he did not mention any specific company names, the implication was strong that wholesalers profiting in the distribution process were a cause of the price increases.

This remark spread instantly through media and social networking sites, igniting public suspicion that 'wholesalers might be hoarding or withholding stock.' Especially from the consumer's perspective, the narrative of the burden of living costs due to inflation versus 'profiteering by businesses' is an easy target for criticism.

Under these circumstances, although it was not named, Kitoku Shinryo, the industry leader that had released its financial results for the first quarter of the fiscal year ending December 2025, found itself the target of strong suspicion, leading to the decision to issue an unusual statement under the president's name.

Kitoku Shinryo Explicitly States, 'There Is No Price Manipulation'

In the statement, Kitoku Shinryo President Yoshihiko Kamata firmly denied the allegations, stating, 'There is absolutely no truth to the claims that we intentionally drove up market prices or obstructed distribution through hoarding or withholding stock.'

The company also clarified that in the rice distribution sector, it acts in a position of 'handling raw brown rice and ensuring stable supply,' and is not directly involved in the formation of retail prices. In fact, it explained that details such as procurement, inventory, and sales performance are reported to the Ministry of Agriculture, Forestry and Fisheries every month, and that it continues to operate under supervision.

In this way, the statement provides a careful and evidence-based rebuttal to the current situation where the company is being targeted by political posturing and rumors.

Market Share of Only 4%, No Price-Setting Power

The annual volume of domestic rice for staple food handled by Kitoku Shinryo is approximately 265,000 tons. This accounts for only 4% of the national demand of approximately 7 million tons, and the company asserts that it is 'not in a position to have the influence to sway the entire market.'

In addition, retail prices are ultimately determined by the retailers themselves, and wholesalers cannot directly control consumer prices. Therefore, the company argues that it is contrary to the facts to conclude that the soaring price of rice is due to 'manipulation' by wholesalers.

Kitoku Shinryo's stance reflects a corporate ethic that prioritizes business transparency and accountability in order to maintain a relationship of trust with consumers.

'500% Profit Increase' Is a Temporary Phenomenon of Structural Change

The statement further addressed the fact that the company's operating profit for the January-March 2025 period was 1.9 billion yen (a 487.4% increase year-on-year).

As factors for this profit increase, the company cited several practical backgrounds, including: (1) the ability to appropriately reflect rising procurement costs in sales prices, (2) improved profit margins due to a decrease in discounted sales, and (3) reduced manufacturing costs due to the closure of the Honmoku plant and its integration into the Okegawa plant.

However, the company calmly analyzed that this profit expansion is 'merely a temporary reaction that occurred within a long-standing structure of low margins and high volume.' It clearly expressed the view that this is a limited result based on special factors, rather than a permanent shift in the profit structure.

Regarding future actions, Kitoku Shinryo stated that it will 'strive to reduce the burden on consumers' and expressed its intention to contribute to the stabilization of rice prices as much as possible through the efficiency of the supply system, cost reduction, and the strengthening of quality control.

In particular, the company plans to focus on working closely with retailers to ensure that government-reserved rice is distributed quickly at appropriate prices.

It also stated that it will continue its efforts to ensure trust in terms of quality, such as preventing foreign matter contamination after milling and thoroughly managing hygiene.

What Should Be Questioned Is the 'Policy Responsibility of the Minister of Agriculture, Forestry and Fisheries'

Now that the position and background of the distributors have been clarified by the statement, the question that should be asked again is the policy responsiveness of Minister of Agriculture, Forestry and Fisheries Koizumi.

The release of stockpiled rice and retail support measures under the slogan of 'delivering affordable rice' are commendable. However, without an analysis of the causes of price hikes and policy planning that addresses fundamental issues, these remain merely temporary 'performances'.

For example, there are many measures that should be taken, such as reviewing the acreage reduction policy for the next fiscal year and beyond, reducing production costs, improving productivity, and implementing market stabilization measures before the supply of new rice. Rather than citing figures from wholesalers in the Diet, listening directly to the businesses would likely reveal more effective countermeasures.

For Credible Explanations and Essential Measures

Kitoku Shinryo's statement provides a thorough explanation based on facts to dispel misunderstandings, and their stance of fulfilling their responsibilities as a distributor is clear.

On the other hand, considering the significant impact that statements by politicians have on public opinion and the market, this is also a situation where the accountability and verification capabilities of the Minister of Agriculture, Forestry and Fisheries, who is responsible for policy, are being called into question.

It is time to lead price stability through essential policies, rather than through performances that create 'enemies' like U.S. President Trump. What is trusted agricultural policy? The origin of that question is being asked again now.

Text by Mao Natsuki (Economic Journalist)

*This article is based on the author's personal views and does not recommend any specific investment, transaction, or policy choice. The content published includes information based on analyses by think tanks and research institutions, but does not guarantee future economic trends or market movements. Please make investments and economic decisions at your own risk.