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Why Japan May Pass On The Bordeaux (Int'l Edition)


International -- Intl' Business: FRANCE

WHY JAPAN MAY PASS ON THE BORDEAUX (int'l edition)

You have to wonder about French President Jacques Chirac's sense of timing--and history. With the 50th anniversary of the atomic bombing of Hiroshima approaching on Aug. 6, Chirac announced in mid-June that France would conduct nuclear tests in the South Pacific. In doing so, he touched off such deep resentment among the Japanese that they could end up boycotting some $6 billion in French imports, ranging from Louis Vuitton handbags to Chteau Margaux.

The Japanese have not yet started to spurn French goods en masse. But the calls for a boycott are remarkable in themselves, given the lack of consumer activism of any kind in Japan. Politicians are in the lead on the issue, which they sense is fueling voters' growing resentment of the West and the belief that Japan must assert itself as a world power. All 10 of Japan's major parties have denounced the underground tests, and ruling coalition leader and Finance Minister Masayoshi Takemura has called upon consumers to avoid French products.

OUTRAGED SURVIVORS. So while a Chanel spokeswoman in Tokyo says she's "not especially worried" about a boycott now, French marketers may be worrying before long. Already, Bic Camera, a chain of eight superstores that sells about $6 million in French handbags, cosmetics, neckties, and wine annually, has put up signs urging the Japanese to shun these products. "Our purpose is to get the Japanese people aware of the incident and to protest together with our customers," says Toshinobu Kawabata, Bic Camera's planning manager.

Others, such as the Japanese Consumers' Cooperative Unions, a group of food stores with 18 million members, are weighing similar moves. Survivors of the Hiroshima bombing are staging a shun-France campaign. "The French aren't troubled by this because the tests aren't in Paris but in the South Pacific," says Hiroshi Harada, director of Hiroshima's Peace Memorial Museum. Australians, too, are upset. French champagne and liquor imports Down Under have dropped 30% since mid-June.

A similar decline in Japan, a much bigger market, could really hurt such French exporters as LVMH Mot Hennessy Louis Vuitton, whose yen-denominated business accounted for 23% of 1994 sales. Japanese pols may try to crank the dispute up another notch by passing a resolution denouncing the tests. Prime Minister Tomiichi's Murayama's Social Democratic Party of Japan received a drubbing in recent legislative elections and needs a popularity boost. And its coalition partner, the Liberal Democratic Party, has close ties to Japan's veterans' groups, who have condemned the tests.

So far, the French aren't budging. And trade diplomats in Paris have warned of possible retaliation should a boycott take hold. Chirac's bid to bolster French prestige is turning into a test of wills.By Brian Bremner and Hiromi Uchida in Tokyo


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