KODAK CRIES FOUL IN JAPAN

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In an international tug of war, Eastman Kodak Co. says Fuji Photo Film isn't playing fair in Japan, and now the U.S. government is taking a look.

Kodak charges the Japanese government is colluding with Fuji to exclude competition in the $9 billion to $14 billion amateur film market, where Fuji holds 74% vs. Kodak's 8%. In the U.S., Kodak says it has a nearly 70% share vs. Fuji's 12% to 14%.

An investigation by U.S. Trade Representative Mickey Kantor began July 3.

"Japan is very much a top growth priority for the company," said Andrew Salzman, worldwide marketing manager and VP-consumer imaging.

Kodak says Fuji controls the four largest distributors in Japan and entices small retailers not to carry other brands through a system of rebates, depriving Kodak of $6 billion in revenue since 1975.

While Fuji admits it received assistance from the government through tariffs on imported film until 1990-when they were dropped-the company now says Kodak just isn't competitive.

"We've essentially had to bypass the [distribution] system to a different group of wholesalers," said Charlie Smith, director of corporate media relations for Kodak.

However, Nicholas Heymann, an analyst at NatWest Securities, New York, said he doesn't expect the U.S. government to expend a lot of political capital on the film issue as in past disputes.

Currently in Japan, Kodak is a sponsor of the Japan Soccer League, and paid an estimated $20 million to be the imaging sponsor of the 1998 Olympics in Nagano, beating out Fuji. Kodak's ad spending "voice is significantly above our share of the market," said Mr. Salzman, who declined to give a budget or percentage of worldwide budget. J. Walter Thompson Co. handles Japan.

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