Stolen sushi trade secrets lead to president’s resignation • The Register

The president of Japanese restaurant chain Kappa Sushi resigned yesterday after a data theft scandal that rocked the world of sushi trains.

The President, Kobi Tanabe, was arrested by the Tokyo Metropolitan Police Department on September 30 on charges of violating Japan’s competition law.

Before becoming head of Kappa Sushi, Tanabe ran rival discount sushi company Hama Sushi, which has accused Tanabe of stealing trade secrets by accessing data caches showing how it priced nigiri down to just 75 cents lowers.

Hama Sushi’s website states that “most menu items are 110 yen,” which is about 75 cents. High-end sushi platters cost more than 300 yen — still not much more than $2.

A former director of Hama Sushi, Tanabe had contacts, including former subordinates, who allegedly emailed him sales data several times a day. Despite working for the opposition, Tanabe reportedly obtained sales data from 500 hama sushi shops.

Although sales data was shared among employees at parent company Kappa Create, local media reported that employees didn’t really know how to analyze and make use of it.

Other stolen data are said to have been procurement costs and suppliers, details or food quantities and planned actions. The head of Kappa Create’s product department was also arrested for allegedly sharing the data internally.

Hama Sushi uncovered the leak during an investigation in January 2021 and filed a report with the police department, prompting raids on Kappa Create’s headquarters.

Kappa Create’s statement detailed yesterday [PDF] that Tanabe had resigned “due to the arrest and detention for breaking the law. The company offered a “sincere apology,” pledged to fully cooperate in the investigation into the sushi scandal, and offered that it was already conducting compliance training for officers and employees.

Increasing global demand for fish, a weaker yen and global events such as the crisis in Ukraine have resulted in higher prices at sushi restaurants, especially those operating on low margins.

The ¥100 sushi conveyor belt, a concept originally pioneered by Kappa Sushi, is a mainstay of such establishments but appears to be on the way out now. Competitor Sushiro, for example, recently raised its record prices to 120 yen, local media reported.

Profits for assembly line sushi in times of such meager margins depend on securing the best prices from suppliers who frequently change their prices, so it might be helpful to understand a competitor’s arrangements.

Tanabe admitted his act to local media, saying whether or not he committed a crime is “a matter of dispute.”

As a Twitter-er In short, it’s hard to imagine anyone struggling with “wholesale price data for chopsticks,” but that may just be a sign of the times. ® Stolen sushi trade secrets lead to president’s resignation • The Register

Rick Schindler

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