On 29 October 2026 the Japan Fair Trade Commission (JFTC) announced that it had issued a recommendation to Maruzen Co., Ltd. under Article 7(2) of the pre-amendment Subcontract Act. When paying its subcontractors in cash, the company had deducted amounts labelled "administrative fees and interest", which was found to violate the prohibition on reducing subcontract payments.
This page summarises the JFTC press release and the attached announcement, summary diagram, statutory extracts and recommendation.
Overview
| Item | Details |
|---|---|
| Date announced | 29 October 2026 |
| Announced by | Japan Fair Trade Commission |
| Company | Maruzen Co., Ltd. (head office: Taito-ku, Tokyo) |
| Business | Manufacture and sale of commercial kitchen equipment, and related business |
| Stated capital | JPY 3,164.95 million |
| Legal basis of the recommendation | Article 7(2) of the pre-amendment Subcontract Act (applied as before under Article 2(2) of the Supplementary Provisions of the amending Act) |
| Provision violated | Article 4(1)(iii) of the pre-amendment Subcontract Act (prohibition of reducing subcontract payments) |
| Subcontractors affected | 385 |
| Work entrusted | Manufacture, repair, and transport and installation of commercial kitchen equipment |
| Amount deducted | JPY 60,888,107 in total |
| Period of deductions | April 2025 to January 2026 |
| Repayment | Full amount paid on 25 September 2026 |
Facts of the violation
According to the "Reasons" section of the recommendation, between December 2024 and December 2025 Maruzen entrusted 385 subcontractors with manufacturing commercial kitchen equipment that it sells or has contracted to manufacture, repairing commercial kitchen equipment it has contracted to repair, or transporting and installing commercial kitchen equipment it has contracted to supply. At the time, Maruzen was a corporation with stated capital of more than JPY 300 million, and the 385 subcontractors were individuals or corporations with stated capital of JPY 300 million or less.
Maruzen's practice was that, when paying subcontractors in cash, it would deduct from the payment an amount calculated by applying a fixed rate to the payment, under the label of "administrative fees and interest". Between April 2025 and January 2026 it deducted a total of JPY 60,888,107 in this way from the payments for these entrustments.
On 25 September 2026 Maruzen paid the 385 subcontractors the full JPY 60,888,107 it had deducted.
The recommendation finds that Maruzen made manufacturing entrustments under Article 2(1), repair entrustments under Article 2(2) and service entrustments under Article 2(4) of the pre-amendment Subcontract Act, that it was a parent business operator under Article 2(7)(i), and that the 385 businesses were subcontractors under Article 2(8)(i). It states that Maruzen reduced subcontract payments without any reason attributable to the subcontractors, which falls under Article 4(1)(iii) of the pre-amendment Act and violates that paragraph.
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Try for free →Explanation in the published materials
The JFTC's summary of the recommendation explains that the Subcontract Act prohibits reducing the amount of payment fixed at the time of the order where the contractor is not at fault, and states that the same conduct is also prohibited under the Toritekihou.
Content of the recommendation
The recommendation requires Maruzen to:
- Confirm by board resolution that
- - deducting "administrative fees and interest" from subcontract payments when paying in cash falls under Article 4(1)(iii) of the pre-amendment Subcontract Act and violates that paragraph; and
- - it will not in future reduce payments for manufacturing entrustments and other work without a reason attributable to the small and medium-sized contractor
- Take the measures necessary to improve its internal systems, such as providing Toritekihou training to its purchasing staff, so that it does not reduce such payments in future
- Make its officers and employees fully aware of the fact that it received the recommendation, the content of the recommendation (excluding the appended table), and the measures taken under items 1 and 2
- Notify its small and medium-sized contractors of the fact that it received the recommendation, the content of the recommendation (excluding the appended table), and the measures taken under items 1 to 3
- Report promptly to the JFTC the measures taken under items 1 to 4
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Statutory wording
According to the statutory extracts in the published materials, Article 4(1) of the pre-amendment Subcontract Act provides that a parent business operator that has entrusted manufacturing or other work to a subcontractor must not engage in the acts listed, and item (iii) lists "reducing the amount of the subcontract payment without any reason attributable to the subcontractor".
Article 7(2) of the pre-amendment Act provides that, where the JFTC finds that a parent business operator has engaged in any of the acts listed in Article 4(1)(iii) to (vi), it is to recommend that the operator promptly pay the amount reduced or take other necessary measures.
Under the current Toritekihou (the Act on Preventing Delay in Payment of Consideration to Small and Medium-sized Contractors for Manufacturing Entrustment and Other Work), Article 5(1) provides that a commissioning business operator that has entrusted manufacturing or other work to a small and medium-sized contractor must not engage in the acts listed, and item (iii) lists "reducing the amount of the payment for the manufacturing entrustment or other work without any reason attributable to the small and medium-sized contractor".
Item (ii) of the same paragraph lists failing to pay the payment after its due date, and states in parentheses that this includes delivering a promissory note in payment.
As to recommendations, Article 10(1) of the current Toritekihou provides that, where the JFTC finds an act violating Article 5, it is to recommend that the violating commissioning business operator pay the amount reduced or take other necessary measures.
Which law applies
According to a note in the announcement, the Subcontract Act was amended by Act No. 41 of 2025 and became the Toritekihou. The announcement explains that the pre-amendment Subcontract Act applies to manufacturing entrustments made up to December 2025, and the Toritekihou applies to those made from January 2026.
The published materials set out the following correspondence of terms:
| Pre-amendment Subcontract Act | Toritekihou |
|---|---|
| Subcontract payment | Payment for manufacturing entrustment or other work |
| Parent business operator | Commissioning business operator |
| Subcontractor | Small and medium-sized contractor |
Sources
- JFTC, "Recommendation to Maruzen Co., Ltd." (29 October 2026, Japanese) https://www.jftc.go.jp/houdou/pressrelease/2026/oct/261029_maruzenn.html
- JFTC, announcement, summary, statutory extracts and recommendation (PDF, Japanese) https://www.jftc.go.jp/houdou/pressrelease/2026/oct/261029_maruzenn.pdf
- e-Gov Law Search, Act No. 120 of 1956 (Toritekihou, Japanese) https://laws.e-gov.go.jp/law/331AC0000000120
This page is compiled from material published by government agencies and from statutory text. Please consult a lawyer where a decision is needed on a specific matter.
