TSE – Tokyo restaurant chains openly defy gov’t closure requests amid virus aid discrepancies

TOKYO — A number of restaurant chains in the capital have come out in opposition against the latest coronavirus state of emergency declaration and are refusing to cooperate with national and local government requests that they shorten business hours.

The Mainichi Shimbun spoke with a number of eateries to find out more about the circumstances on the ground.

Among Tokyo’s adult population, Nishiazabu is one of the capital’s popular neighborhoods for going out. When the Mainichi went there on the night of Jan. 14, almost all of the eateries were getting ready to close ahead of the requested 8 p.m. closing time, and a quiet was settling over the area.

But at the Nishiazabu branch of Japanese pub chain Gonpachi, facing an intersection on a large street, the lights still shone from its illuminated garden trees past 8 p.m. One after another, couples, as well as groups of colleagues who had finished work, could be seen entering the business.

The Tokyo Metropolitan Government has from Jan. 8 been requesting that dining businesses cut their open hours back to 8 p.m., but this branch of Gonpachi was still going until 3:30 a.m. the following morning.

Its operator Global Dining, which is listed on the second section of the Tokyo Stock Exchange, is not cooperating with the business-hour requests affecting its around 30 restaurants in Tokyo and three surrounding prefectures. A PR head at the company stated, “We are prepared for the government to publically name our restaurants (for non-compliance).”

Elsewhere, Ikka Dining Project, which manages Japanese pubs including Hakata Gekijo and is listed on the Tokyo Stock Exchange’s first section, did briefly shorten hours at its total of around 70 eateries in capital regions areas affected by the state of emergency. But since Jan. 9, it returned a majority of its pubs to working ordinary hours past 8 p.m.

In a company message posted to its website on Jan. 12, CEO Taro Takenaga emphasized, “It is our calling also to protect people’s employment.” He maintained that if the company were to cooperate with the requests for shortened hours, its total of over 1,000 full-time and part-time employees and its trading partners would not be able to maintain their lifestyles.

The reason behind both companies choosing to publically flout the national and metropolitan government requests concerns the money paid in cooperation fees if firms do comply with calls to shorten hours. Per restaurant location, businesses are eligible to receive 60,000 yen (about $578) a day, but the Tokyo government is limiting the offer to individual traders and medium-and small-sized businesses, which have 50 million yen (roughly $482,000) or less in capital, or 50 employees or fewer. Large businesses are exempt.

According to a disgruntled Takenaga, the metropolitan government’s measures “felt unfair” on Ikka Dining Project, a large company. It’s also hard to say that the cooperation funds provided cover the sales of small- and mid-sized businesses. Global Dining is among the companies eligible for the payments, but its CEO Kozo Hasegawa said, “It’s impossible to maintain our business and employment arrangements (based on the current support offered for complying).”

Some chains who are ineligible for help from the metropolitan government have decided to close their stores. Monteroza Co., the Tokyo-based restaurant operator which manages Japanese pub chains including Uotami, announced it will sequentially close 61 of its 337 stores in the capital.

With the expectation that shortened hours will lead to a fall in sales, the company made the decision that without reducing its staff and rent costs, sustaining the business would become very difficult. A head at the firm said, “We wanted to send some kind of message to the metropolitan government, so we decided to close some of our stores.”

Some large companies are also trying to get the Tokyo government to include them among the businesses eligible for support aid. Tokyo-based firms Kiwa Corporation Co., which manages eateries including Chinese food chain Hong Hu Jiao Zi Fang, and Daisyo — operator of the Syoya Japanese pub chain and other properties — each sent their own petitions for inclusion to the government on Jan. 13.

Kiwa Corporation head Takeshi Nakajima spoke to the Mainichi Shimbun and criticized the metropolitan government’s response to the situation, saying, “Isn’t the main idea of facing down the coronavirus that they (municipal governments) standardize their support?”

In the three surrounding prefectures of Kanagawa, Saitama and Chiba that are also affected by the state of emergency, big companies are eligible for support payments. In the previous state of emergency in spring 2020, the prefectures limited financial aid to medium- and small-sized companies. But in November 2020 the central government announced it intended to shoulder 80% of fiscal aid payments and that there would be no limits of the scale of eligible businesses, which led to the criteria’s expansion.

Behind the metropolitan government’s decision to limit its offer to small- and medium-sized firms is the state of its worsening finances as a result of the coronavirus crisis. It has already allocated more than two trillion yen (about $19.28 billion), and its once flush coffers are running dry.

Although municipal governments only need to pay 20% of the support aid, the Tokyo Metropolitan Government has a far greater number of eateries to take care of than other prefectures do. A senior Tokyo government figure said, “The battle with the coronavirus is a protracted one. It would be hard for us to briefly expand the target for aid and then have to shrink it again, so it’s a decision we must approach with caution.”

(Japanese original by Hajime Nakatsugawa, Business News Department, Koichi Uchida and Hitomi Saikawa, City News Department)