Recommendation over payment cuts: JPY 60,888,107 taken from 385 contractorsYou may not cut an agreed price on your own
On October 29, 2026, the Japan Fair Trade Commission issued a recommendation to Maruzen Co., Ltd., a manufacturer and seller of commercial kitchen equipment, finding conduct in breach of Article 4, Paragraph 1, Item 3 of the Subcontract Act as it stood before amendment (prohibition on reducing subcontract payments). Between April 2025 and January 2026 the company deducted a total of JPY 60,888,107 from sums due to 385 subcontractors, labelling the deductions as administrative fees and interest. Maruzen has paid back the full amount. Any company that deducts items from its payments has reason to review its own practice.
- (1) OrderOrders placed for manufacture of commercial kitchen equipment, repairs contracted by Maruzen, and transport and installation
- (2) DeductionAmounts deducted from the payments due, labelled administrative fees and interest (April 2025 to January 2026)
- (3) RecommendationThe Japan Fair Trade Commission issued its recommendation on October 29, 2026 (Article 7, Paragraph 2 of the pre-amendment Act)
- (4) ConfirmationConfirm by board resolution that payments will not be reduced where there is no fault on the contractor's side
- (5) RepaymentThe whole of the disadvantage (JPY 60,888,107) was paid
Key points
- The party concerned is Maruzen Co., Ltd. (Negishi 2-19-18, Taito Ward, Tokyo; capital JPY 3,164,950,000; main business: manufacture and sale of commercial kitchen equipment). The announcement is dated October 29, 2026
- The conduct: for orders to manufacture commercial kitchen equipment, to carry out repairs that Maruzen itself had contracted for, and to transport and install such equipment, the company deducted amounts from the payments due under the heading of administrative fees and interest
- The scale: a total of JPY 60,888,107 affecting 385 subcontractors, from April 2025 to January 2026. The provision applied was Article 4, Paragraph 1, Item 3 of the pre-amendment Subcontract Act, and the recommendation was issued under Article 7, Paragraph 2 of the same Act
- The recommendation requires the company to confirm, by a resolution of its board of directors, that it will not reduce the amount payable for manufacturing and similar orders where there is no fault attributable to the small or medium-sized contractor
- Maruzen paid the whole of the disadvantage (JPY 60,888,107)
What to do in practice
- If you place the orders, list every item you deduct at payment time (administrative fees, interest, trade discounts, transfer charges and so on) and check one by one whether there is fault on the contractor's side and whether the deduction was agreed in advance
- If you take the orders, compare the price agreed at the time of the order with the amount actually received, and confirm the label and the basis of any difference
- If deductions are still made mechanically at a fixed rate, review the payment rules and the calculation method themselves
When you ask another company to make something, cutting the agreed price afterwards without a reason is forbidden by law. On October 29 the Japan Fair Trade Commission said that a maker of commercial kitchen equipment had taken a total of JPY 60,888,107 out of the money owed to 385 partners, calling it administrative fees and interest, and told the company to put its payment practice right. The company paid the whole of that money back.
- ×Does not apply: Cutting a price agreed at the time of the order, later and without a reason
- ×Does not apply: Taking a fixed percentage off the payment under names such as administrative fee or interest
- ○Applies: Revisiting the price only where there is fault on the side that took the work
Points
- A price you have agreed may not be cut when the other side is not at fault
- Between April 2025 and January 2026 this company took a total of JPY 60,888,107 from 385 partners
- The Japan Fair Trade Commission asked the company to confirm at a board meeting that it will not cut payments in future
What the words mean
- subcontracting
- taking work from another company to make or repair things
- recommendation
- a formal demand from a government body to correct the way something is done
- Japan Fair Trade Commission: Japan Fair Trade Commission, Recommendation to Maruzen Co., Ltd. (October 29, 2026, Reiwa 8)
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.