ABSTRACT
The movement towards rationalisation of the distribution system is found on the consumer side. Japanese consumers claim that higher commodity prices are due to the complex distribution system and that immediate rationalisation is vital. Although the fragmentation of the retailers will continue to necessitate hand-holding wholesalers, there is room for more rationalisation of the wholesale sector. The Japanese distribution system offers a close parallel with its agricultural industry. They are both mostly managed by ‘Mom and Pop’ teams, plagued with marginal small units, but nevertheless entrenched in their positions through the activities of their powerful lobbies and the promising price of land on which their establishments stand. In many cases, paying the wholesalers’ margin is the only feasible alternative, unless the new entrant is willing to make a major investment in setting up his own separate distribution channels. There are social, political and historical factors behind the inefficiency of the distribution system.
