While the export value of wagyu beef continues to grow, fake wagyu products are now rampant at department stores and other places in parts of Asia.
Falsely indicating the origin conflicts with the Unfair Competition Prevention Law and other regulations in Japan, but these are not applicable overseas.
To address the situation, the Agriculture, Forestry and Fisheries Ministry plans to encourage relevant organisations to register products under the Geographical Indication (GI) protection system (see below), under which food and other products produced in particular areas are registered as intellectual property, while strengthening surveillance for fake products in co-operation with the countries concerned.
Singapore 'Matsusaka-ushi' beef
"We hope to increase Matsusaka-ushi beef exports, but there are so many fake products," said an official at the Matsusaka municipal government in Mie Prefecture.
The municipal government serves as the secretariat for Matsusaka-ushi beef producers' organisations and other entities.
When the city participated in a food fair in Singapore as an exhibitor last summer, municipal government officials in charge found a banner reading "Matsusaka-ushi" in front of a local meat shop.
The official said, "It is necessary to conduct a DNA analysis on the beef to determine if it is fake. We don't have the time or money to do that."
While fake Kobe beef products have also been found, an official at the Kobe Beef Marketing and Distribution Promotion Association, comprised of Kobe Beef producers and distributors, said, "It is impossible for a producers' organisation alone to tackle such a problem."
The agriculture ministry established the Agriculture, Forestry, and Fisheries Intellectual Property Protection Consortium to monitor fake products in Asia.
According to a 2015 survey it conducted in six countries and territories including China, Indonesia and Hong Kong, counterfeit products were found in 31 cases.
The ministry said it has mainly found counterfeit wagyu products this fiscal year.
Trademark registration is used for preventing fake luxury food ingredients from being widely distributed.
However, there are some cases overseas in which trademark registration was not approved due to invalid reasons.
One example is Yamagata Prefecture's Yonezawa-gyu beef.
In order to prevent meat being branded as Yonezawa-gyu beef by a third party, the council for the promotion of the Yonezawa-gyu beef brand, comprised of local livestock farmers and local governments, applied for a trademark with the Trademark Office of the State Administration for Industry and Commerce of China.
However, in 2015, the Chinese authority denied the application because the trademark would cause confusion, since it includes the name of a place in Japan.
The council again applied for the trademark registration of a logo containing a drawing of a Yonezawa cow accompanied with the letters "Yonezawa-gyu," but that application was refused for a similar reason.
"We don't even understand why our application was not approved. In China, our stance cannot be accepted," an official of the council said.
Even though sales of counterfeit goods have been confirmed overseas, both the Unfair Competition Prevention Law and the Law against Unjustifiable Premiums and Misleading Representations do not apply.
Regarding luxury food products, the ministry has therefore encouraged relevant organisations to obtain trademark registrations to protect their brands.
However, they are often not registered as trademarks as intended. If a trademark is violated, a relevant producers' organisation or other entities need to file a lawsuit on their own, making many of them reluctant to register trademarks.
The ministry started the GI protection system in 2015, making it possible to impose fines on those who produce or sell products with falsified labeling about the place of production.
Similar systems have been introduced in more than 100 countries, including EU nations.
The ministry also registered Japan's GI mark as a trademark in such countries as South Korea and Australia, we well as the European Union, by the end of last year.
Furthermore, the ministry plans to crack down on fake products by concluding a bilateral agreement to ensure mutual protection of GIs with respective countries.
"If fake products of inferior quality are widely distributed, it will undermine the genuine brand's products. We would like to boost surveillance to prevent negative effects from occurring," a ministry official said.
Exports at record high
Behind the spread of fake wagyu products lies its high popularity overseas as a luxury food item.
In 2016, the export value of wagyu was ¥13.6 billion (S$172 million), up 24 per cent from the previous year, and its export volume rose 18 per cent year-on-year to 1,909 tons.
Both figures are record highs, with the export volume more than 20 times higher than a decade ago.
One-third of exports are destined for Hong Kong, followed by Cambodia, the United States, Singapore and Thailand.
Due to the outbreak of bovine spongiform encephalopathy (BSE), also known as mad cow disease, in Japan in 2001, China, South Korea and other countries have banned wagyu imports.
However, some producers' organisations are seeking trademark registration in China to prevent the value of their brands from being undermined by the spread of fake products.
Geographical Indication (GI) protection system
Under the system, the central government and other authorities evaluate and give guarantees on the quality of agricultural, forestry and fisheries products and processed foods that are produced in specific areas.
Twenty-four products with high brand value are currently registered as GIs, including Kobe Beef, Tajima Gyu/Tajima Beef, Yubari Melon and Shimonoseki Fuku (tiger pufferfish).
Applications for the system have currently been made for more than 60 products.