Japanese Brands in Europe: Who Is Expanding Despite High Costs and Regulation

Lower tariffs have cleared one hurdle, but operating barriers remain. Interest from Japanese brands in Europe keeps rising. What will decide success is the cost, regulation and channel choices after they arrive.

What did the Japan–EU EPA open up for Japanese products?

According to Japan's Ministry of Foreign Affairs, the Japan–EU EPA took effect in February 2019 and created a free economic zone that accounts for roughly one-third of world trade. The EU removed tariffs on about 99% of Japanese tariff lines. Sake and other alcoholic beverages became duty-free immediately, and major export items such as beef, tea and marine products are largely duty-free. 130 Japanese geographical indications (GIs) are protected in the EU. The EU-27 has a population of about 450 million, 3.6 times Japan's.

How do Japanese companies view the European market?

In JETRO's survey published in February 2026, the EU ranked third among expansion targets at 23.6%, behind the United States (40.7%) and China (25.5%). When choosing a market, 86.1% of companies weigh scale and growth potential.

Japanese companies already in Europe are also positive. JETRO's December 2025 survey of Japanese firms in Europe (778 valid responses) finds that 65.5% expect a positive operating profit for 2025 and 48.9% plan to expand within one to two years. Expansion intentions are 52.9% in the UK and 47.2% in the EU.

What are the challenges once Japanese brands are in Europe?

In the same survey, the most frequently cited operating problem is high labor costs, at 56.7%, up 5.6 percentage points from the previous year. In Western Europe the figure is 58.5%. Regulation is a second hurdle. Under the EU Packaging and Packaging Waste Regulation (PPWR), most food companies surveyed worry that enforcement will differ across member states.

For Japanese artisans and small and mid-sized brands with limited production capacity, setting up a base in Europe, hiring staff and handling each country's rules can quickly cost more than the revenue they bring in.

Where does the problem lie for Japanese brands entering Europe, and where can they start?

The problem lies in treating Europe as a single market. The EU has 27 member states, plus the UK and Switzerland, with different languages, channels and shopping habits. Launching everywhere at once usually means going shallow in every market.

The starting point is to pick one country and one channel scenario: a department store, a selected-goods shop, or hotels and restaurants. Find a setting where customers already use the product, then bring the product in through a partner who knows that local market well.

Researching the market, building a range, and turning it into a proposal that can be negotiated directly is the core of the ArsRes Academy Fashion Buying and Merchandising course.