Japanese sushi chain boss resigns amid accusation of improper data access

Data theft stinks, says victim. Alleged perp claims he's getting a raw deal

The president of casual Japanese chain restaurant Kappa Sushi resigned yesterday in the wake of a data-theft scandal that has rocked the world of sushi trains.

The president, Kobi Tanabe, was arrested by the Tokyo Metropolitan Police Department on September 30 on allegations of violating Japan’s competition laws.

Before he became boss of Kappa Sushi, Tanabe led rival discount sushi establishment Hama Sushi - which has accused Tanabe of stealing trade secrets by accessing data caches that reveal how it slices the price of nigiri to just 75 cents.

Hama Sushi’s website states that “most menu items are ¥110,” equivalent to roughly 75 cents. Higher-end sushi plates exceed ¥300 - still not much more than $2.

As the former director of Hama Sushi, Tanabe had contacts, including former subordinates, who allegedly emailed him daily sales data on several occasions. Despite working for the opposition, Tanabe reportedly received sales data for 500 Hama Sushi stores.

Although the sales data was shared among parent company Kappa Create employees, local media reported those employed didn’t really know how to analyze it and make it useful.

Other stolen data allegedly included procurement costs and suppliers, details or food quantities and planned campaigns. The head of product department at Kappa Create was also arrested, as he allegedly shared the data internally.

Hama Sushi revealed the leak during a January 2021 investigation and filed a report with the police department, which resulted in raids on Kappa Create headquarters.

Kappa Create’s statement yesterday detailed [PDF] that Tanabe had resigned “on the grounds of being arrested and detained for violation of the law. The company offered “deepest apologies,” vowed to fully cooperate with the sushi scandal investigation, and offered that it was already conducting compliance training for officers and employees.

Growing worldwide demand for fish, a weaker yen and global events such as the crisis in Ukraine have led to an increase in prices at sushi restaurants, especially those operating on lean margins.

The ¥100 sushi conveyor-belt plate, a concept originally introduced by Kappa Sushi, is a mainstay of such establishments but now appears to be on its way out. For example, competitor Sushiro recently raised its plate prices to ¥120, reported local media.

Profits for conveyor-belt sushi in times of such lean margins rely on securing the best prices from suppliers, who often change prices, so understanding a competitor’s agreements could be useful.

Tanabe admitted his deed to local media and said whether he had committed a crime or not was “a matter of contention.”

As one Twitter-er put it, it's hard to imagine someone doing hard time for “chopstick wholesale price data,” but that may just be a sign of the times. ®