Let Them Eat (Sponge) Cake

A number of publications including the Wall Street Journal and the Guardian have run stories over the last few weeks on Japan’s escalating “Butter Shortage.”

Butter is “rarely used” in traditional Japanese cooking, as is the case for most dairy products, but there is demand among the nation’s treat makers for the baking essential. Unfortunately, a confluence of factors from bad weather to shifting demographics and changes in the Japanese dairy market have, it’s been said, made butter a hot commodity since at least 2014. So much so, in fact, that Japanese stores have had to institute policies rationing the sale of butter and, perhaps perversely, turned butter into “something of a luxury item.”

This would be a non-issue in a free economy wherein producers would import butter to meet consumer demand, but the dairy industry in Japan is subject to strict regulations and protectionist policies. Indeed, the responsibility fell to the Japanese government to order emergency butter shipments from abroad, making this the “fifth year in the past eight the government has ordered such measures” according to WSJ.

Yet this all could change in the coming weeks in months as Japan enters into discussions regarding the 12-nation Trans-Pacific Partnership trade deal, which could have broader effects for trade in Asia and the US.

Could one nation’s collective sweet tooth tip the scales in favor of further deregulation? Who knows? One should never underestimate the power of butter.