Nestle To Bail Out The City Of Yubari With Chocolates

nestle-to-save-yubari-cityI thought I’d seen everything when I read the headline in today’s paper that Nestle was going to bail out Yubari city from its bankruptcy. As it always turns out with these headlines, it was slightly exaggerated but I really do have to take my hat off to Nestle. It turns out that Nestle has decided to donate 10 yen to the city of Yubari from every pack sold of its latest brand of Kit Kat. From next Monday, Nestle will begin to sell the “Yubari Melon Kit Kat” which as you guessed is filled with powder from the famous melons of Yubari.

Just in case you haven’t been following the news on the quaint city of Yubari, (not to be confused with Gogo Yubari), I’ll do my best to give you a ten second summary of why the largest food company in the world would be donating yen to a local government. Back in the Showa period, Yubari was a symbol of post-war Japan with a healthy population of over 100,000 people and a vibrant industry centered around the Mitsubishi coal mine. Do you want to ride a Melon? Yubari did!As I’m sure you’ll have guessed already, the canary died about twenty years ago – along with the mine – and since then the population has dwindled to about a tenth of its peak. In order to revive the regions economy, the local mayor decided to build an extravagant amusement park centered around the theme of Yubari’s famous cantaloupe melons. Say no more. The city could never repay the debt related to this and other extravagant projects and resorted to short-term high interest rate financing from the local banks. All of this became public last year and the city was officially declared bankrupt. (Just in case you care, here is a map of where Yubari is in the island of Hokkadio courtesy of the official Yubari City page.)

So, you may ask, why on earth should Nestle donate 10 yen to a bunch of amateurs who thought that they could turn a fruit into an amusement park? You’re absolutely right. It is just ridiculous. Except this is Japan, and the population clearly has a soft spot for the 0.01% of Japan’s population that is stuck still living in poor old Yubari. Nestle claim that their new product is answering the wishes of the people of Hokkaido who wanted to know if there was a way that they could help Yubari. Of course, they could just donate cash directly to Yubari’s “Yellow Handkerchief of Happiness” which is the official fund that the Yubari city has set up to help return the city’s debt. (Wow!) What if I don’t want to donate to Yubari but I still want to eat a melon flavoured Kit Kat? Do I get my 10 yen back?

Yubari Melon Melts in your mouthEven better yet – and this is why I really do take my hat off to Nestle – apparently they are going to sell the new “Yubari Melon Kit Kat” for 150 yen – a full 30 yen higher than the price that they normally charge for Kit Kats. Can anyone tell me what happens to the 20 yen that they are not donating to Yubari City? I’ll guarantee that I can’t get that back.

Kampai to them. That is why they’ve been able to grow a business which is as large as their neighbour, Ezaki Glico who is famous for the Pocky line. (Nestle is in Kobe and Glico is in Osaka. Both had sales in Japan of about 2.5 billion US dollars last year). The last time Nestle was being “more Japanese than the Japanese” was back in 2002 when someone realized that Kit Kats could be sold to Kyoiku Mamas (教育ママ, overly protective Mothers who wanted their kids to study a lot) who had children sitting University exams. It turns out that if you pronounce Kit Kat with a Japanese accent, it sounds very similar to “You are sure to succeed” (きっと勝つ) and so the Mum’s thought it was a good omen to give to their jukensei (受験生, studying for an exam) children. This time it seems that the Kat in Kit Kat might be referring to what they should do to the salary of the local politicians in Yubari…

Update: This video report from Monacle was done on Yubari in Feb 2008. Adds some quite interesting insights into the town, its history and its plight. Click the middle of the movie to play:
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13 thoughts on “Nestle To Bail Out The City Of Yubari With Chocolates”

  1. A brilliant marketing scheme….watch the sales of kit kat hit records heights ….for 10% backhander to Yubari! wow…next will be starving kids in africa kit kat ..watch for it!

  2. I love this city. I clicked on the link for the yellow handkerchief fund and you can actually pull up the number of people who donated money to it. They even offer a nice geographical split of where the donations came from:

    Japan (not including Hokkaido) = 195,000 yen
    Hokkaido (not including Yubari) = 337,481 yen
    Yubari City = 0 yen

    Banzai for the citizens of Yubari!

  3. well maybe they can get a good tax break for donating to charity…..themselves

    lovely melons!

  4. Tousen, you’ve got to remember that it is the city that went bankrupt and not the individuals who live there.
    My guess is that at least half of the population are probably pensioners who clearly don’t contribute to income tax – and we all know that Japanese pensioners have huge hoards of cash in their bank accounts (and their drawers!!).
    It wouldn’t surprise me if the other half of the population are farmers and because 90% of farmers in Japan don’t pay any income tax at all then they aren’t going to be contributing much to the parties held at City Hall either.
    It just shows the apathy of the locals to the problems. Someone who is smart at marketing has sucked in the rest of the country but the locals seem to know best…

  5. Akio48, ah it took me a while.
    For those of you who couldn’t work it out either.
    Heisei Denden (平成電電) was a small independent telecom operator that raised cash from Mr. and Mrs. Watanabe by promising them a 10% interest rate on special bonds that they called “Heisei Denwa Partner System”. As is always the case they forgot to read the small print that said

    「倒産した場合には資金は一切返済されない」

    and so when the company went bust last year for fraud they got zero back. This was pretty contraversial as in Japan normally small investors get protected (by the government) when a company goes bankrupt. (Although a lot of professional investors got burnt on Mycal, most Mr. and Mrs. Watanabe bond holders got a good chunk of their money back).

  6. Certainly there must be some Yubarians who could donate to the fund. I am sure they are not all dirt poor.

    I liked the green tea kit kat.

  7. I read in one of the Japanese newspapers over the weekend that Yubari is the poorest city in Japan, by over 3 times! The next was another city in Hokkaido, and actually most of the top 10 were Hokkaido cities. Next was Osaka, with a bunch of poor cities there too. Are Hokkaido and Osaka not cool anymore?

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