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Tuesday, Apr. 05, 2011

Japan disaster worries Oregon's SakeOne

By The Oregonian

FOREST GROVE, Ore. -- In the moments following the March 11 earthquake in Japan, SakeOne President Steve Vuylsteke feared for the lives and livelihoods of his business partners at the Momokawa and Yoshinogawa brewing companies in the Aomori and Niigata prefectures.

"We've heard reports of some sake breweries being completely destroyed, workers still missing, rice fields that have been obliterated," Vuylsteke said.

After Vuylsteke established email contact with Momokawa and Yoshinogawa companies' heads, his worries didn't subside with their reports of no injuries and minimal damage to the breweries. Instead, Vuylsteke's thoughts turned to the impact that decimated infrastructure and radiation concerns could have on his sake import and distribution business.

Weeks into a crisis that has yet to stabilize, the concerns remain.

Vuylsteke wonders how his partners will get their bottled sake to the Tokyo port where it ships out to the United States as they deal with limited electricity and gasoline, damaged roads, and huge swaths of radioactive land that must be avoided when transporting goods.

He also wonders whether stricter U.S. standards on Japanese goods will delay shipment once the sake makes it to the harbor.

"If (Momokawa and Yoshinogawa) are challenged in their ability to continue to make and bottle and ship sake, then that certainly poses significant financial challenges for them and for us," Vuylsteke said.

SakeOne's dilemma represents a concern shared by many American companies with business interests in Japan, such as food distributors, tech companies and automobile manufacturers, said Ben Yang, a University of Oregon assistant professor of decision sciences, who studies supply chains.

"Whenever there's a disruption like this, such as food contamination or poisoning, the disruption always comes from both sides," Yang said. "One, if your supply is bad, the government might prevent the supplier from making the supply."

The other issue, Yang said, is potential that fear of radiation could cause a dip in demand for Japanese-made goods.

The potential for consumer fear is a worry not lost on Vuylsteke, whose Forest Grove sakery imports up to 10,000 cases of sake from Japan each year, in addition to the 70,000 cases it makes onsite with yeast and other ingredients imported from Japan.

The rice wine is distributed to cruise ships, restaurants, resorts and retailers throughout the Americas.

"At this point, there seems to be a lot of misinformation," he said.

Sake hasn't arrived alongside milk, fruit and vegetables on the list of Japanese items the U.S. Food and Drug Administration has flagged for detainment upon entry into the United States if they came from the prefectures most affected by radiation. And Momokawa and Yoshinogawa are located outside the radiation zones.

Lt. Laura Williams, a spokeswoman for the Coast Guard, said Coast Guard officials are conducting additional screening on any ship that has come within 50 nautical miles of the Fukushima Dai-ichi nuclear plant where the nuclear meltdown occurred.

"Obviously, the whole world is checking everything that's coming in from Japan," said John Marshall, a manager for W.J. Byrnes & Co., the Portland-based company that handles customs for SakeOne.