The Fight for Real Kobe Beef Is Coming to a Restaurant Near You

If you've ever ordered Kobe beef in the U.S., it probably wasn't the real thing — but for the first time ever, a new rule could put restaurants falsely claiming to serve the world's most prized meat in the hot seat. As of this fall, Japanese producers of the tender delicacy are demanding a special "geographic indication" label [.pdf] — also used to distinguish Champagne — to stop businesses across the globe from calling beef "Kobe" unless it's raised in the Hyogo Prefecture of Japan. The name grab, filed quietly with a branch of the Japanese government in mid-August, could force hundreds of restaurants and farmers to change their names, menus, and marketing — or face lawsuits.

"Businesses have been using the wrong Kobe terminology for years. It's like a trademark: You can't brew your own beer and call it Budweiser," explains Charles Gaskins of the American Wagyu Association. The label creates potential legal hassles for hundreds of restaurants — from upscale steakhouses to neighborhood burger joints — since only nine businesses in America serve legitimate Kobe, according to the Kobe Beef Marketing & Distribution Promotion Association, a trade group that keeps meticulous records of each certified head of cattle sold. Many American restaurant owners, who are really selling Wagyu beef instead of Kobe, simply don't know they're using the term incorrectly.

The use of the phrase "Kobe" beef has gone unregulated in the U.S. for years. But Japanese farmers are now trying to change that.

Opponents of food fraud say it's only fair that Japanese farmers, who work tirelessly to produce the luscious velvety meat under strict agricultural oversight, be allowed to claim the word "Kobe." "It's what they should do. They should protect their brand," says chef David Walzog of the SW Steakhouse at the Wynn resort in Las Vegas, which serves certified Kobe beef for $55 an ounce. "This has been a long time coming. The truth-in-menus movement has been ramping up, thanks to social media. People are awakening to the truth about Kobe."

But restaurateurs and farmers — some of whom have spent decades building brands that use the term — say there's no point in splitting hairs when the average customer doesn't know the difference and it has a different cultural meaning in Japan. "It not only affects restaurants, it affects the American consumer. We should do everything we can to stop it," says R.L. Freeborn, founder of Kobe Beef America, the country's largest distributor of American Wagyu. (Japan's Ministry of Agriculture, Forestry and Fisheries is accepting public comments regarding the application until Nov. 24.) Japan has plenty to gain financially from the policy push. But America? Not so much, says Freeborn. "From the American point of view, it will do a lot more harm than good," he says.

Photo: Aaron Tam/AFP/GettyImages

What is Kobe beef?

The difference between Kobe and lower-grade genetic spin-offs is simple. Real Kobe beef comes from the black Tajima breed of Wagyu (literally, "Japanese cattle"), raised under strict agricultural oversight in Hyogo Prefecture region of Japan. The cattle are fed only local grass and water and are genetically predisposed to heavy fat marbling in the muscles, which yields a rich flavor and silky texture. As legend has it, farmers feed the divine beasts beer, play them music, and give them massages.

The fat itself is a rare treat. It's evenly distributed through the beef and has a "melting point" lower than the human body temperature — so the beef dissolves in your mouth like butter. It's full of good-for-you unsaturated fatty acids and high levels Omega-6, found in olive oil and avocados.

To qualify as Kobe, the cattle are raised in one of 260 certified farms and must weigh less than 1,034 pounds. The cattle must also earn a "marbling ratio" score, which measures percentage of carcass to lean fat, of more than six, and a meat quality score of four or five. And it has to be processed in a slaughter house in Hyogo, Japan. Those high quality and consistency standards make Kobe the Blue Moon Diamond of the beef world — extremely rare, coveted, and expensive. The Kobe Beef Marketing & Distribution Promotion Association says only about 5,000 head of the cattle make the cut each year. Of that, only about 10 percent are exported outside of Japan, according to Forbes magazine.

Price tags reflect that. The beef goes for roughly $20-60 an ounce at restaurants in the United States, where owners serving the real stuff are awarded a gold cow statue, a 10-digit beef identification number, and photograph of the farmer by the Kobe Beef Federation to prove authenticity.

"Kobe is beautiful on its own, sliced thin, and served raw with a hot stone. We serve it raw so guests can see the marbling themselves. It's a very unique product," says Devin Hashimoto, chef of Mizumi at the Wynn Las Vegas, which serves certified Kobe. "Kobe" burgers might appear on countless menus, but it's laughable to think a restaurant could sell it for less than hundreds of dollars, Hashimoto says. "It's like, $16 for Kobe sliders? Um, I don't think so."

A Kobe certification plaque at the Wynn Las Vegas. Photo: Courtesy Wynn Las Vegas

If you order Kobe in the U.S., chances are, what you're really getting is Wagyu. But because of loose labeling rules in the U.S., that can mean one of three things. It could mean that it's beef from cattle bred and raised in Japan, just outside of Kobe's special Hyogo Prefecture region. Or it could mean it's beef from a pure bloodline of Japanese cattle raised in the U.S. or Australia. The last — and farthest from real Kobe — is beef from Japanese cattle that has been crossbred with Angus or cheaper American stock.

Restaurants and farmers use the terms "Japanese beef," "Japanese Wagyu," "Wagyu," "American Kobe," and "Kobe" interchangeably, and the USDA does nothing to regulate it. It's why you see "Kobe" selling for $16 on one menu and $200 on another.

Some Wagyu in the U.S. is high-quality and delicious, but it's a step down from Kobe. The meat appears darker and is generally not as flavorful, rich, and buttery. If it's crossbred with American cattle, it has a fleshier texture and tastes more like a typical cut of Angus. It's cheaper, too: Wagyu raised in America costs roughly $3-7 per ounce, depending on the cut.

Americans first discovered a love for Kobe during World War II, when soldiers passed through the region of Japan. Farmers in the U.S. and Australia began importing Japanese cattle in the mid-1970s but it didn't become widely popular in America until around 2001, when Japanese beef imports were banned due to the mad cow scare. Trendy dishes like "Kobe Carpaccio" and "Kobe meatballs" hit the dining scene from Miami to Seattle. Everyone from celebrity chefs to owners of big chains and neighborhood bistros falsely claimed to serve it.

Customers, who were led to believe they were tasting precious meat, forked over $50 for burgers and $300 for steaks — but none of it was real. Anyone who bought "Kobe" in the states between 2001 and 2012 was scammed, according to a Forbes investigation. None was imported from Japan during that time period: "In practice, no Kobe beef was shipped to the U.S. until November 2012, and even this small delivery was an anomaly, as no more would reach our shores until March 2013."

Today only nine businesses in the U.S. serve the real thing, according to the Kobe Beef Marketing & Distribution Promotion Association. They include restaurants in the Wynn Las Vegas, Nick and Sam's Steakhouse in Dallas, the MGM Resorts International in Las Vegas, Bazaar Meat by José Andrés in Las Vegas, the three-location Alexander's Steakhouse, 212 Steakhouse in New York City, and Teppanyaki Ginza Onodera in Honolulu. (The first Canadian restaurant to receive Kobe certification, Park in Montreal, did so earlier this year.)

Carlos Osorio/Toronto Star via Getty Images

Wagyu beef, which is often mislabeled as "Kobe." Photo: Carlos Osorio/Toronto Star via Getty Images

Why label now?

In Japan, the move to score a geographic label for Kobe is a sign the country is stepping up its game in the international beef industry, according to the American Wagyu Association. Japan's long-term plan is to become a major beef exporter — and according to a recent AWA newsletter, the filing is "no doubt part of a strategy to achieve that goal."

In 2012, Japan exported $40 million in beef, and it plans to more than double that to $93 million in 2016. By 2020, that number will soar to $186 million, Japanese officials project. The U.S. still dwarfs Japan, exporting $7.13 billion in beef last year, but the Kobe label is one way for Japanese beef producers to carve out an exclusive niche internationally. "Precious heritage Tajima cow is supported by the affection and pride of farmers trying to protect the Kobe beef quality," Japanese beef producers wrote in their application for a geographic label.

Today, it's still easy to fudge what passes for Kobe in America. The term is patented in Japan but not protected by U.S. law. "It gets abused. To me, it's unethical," says Hashimoto. Others call it a labeling free-for-all — but Kobe's new name claim would change that.

The "Kobe" label is one way for Japanese beef producers to carve out an exclusive niche internationally.

If the "geographic indication" labeling passes, the U.S. government would still not be required to enforce it, since the labeling papers were filed in Japan, a USDA official says. But Japanese beef producers could enforce it through lawyers. And the Japanese government could, too, through trade sanctions. "It would allow them to stop restaurants from using the word," says Polk Wagner, a professor at University of Pennsylvania specializing in intellectual property law. "It's a hybrid way of enforcing. And it seems to have worked with Champagne and California sparkling wine." Restaurants and wine producers quickly stopped using the term Champagne incorrectly after makers of Champagne filed for the label, he points out.

In the case of Kobe, restaurants may react the same way. Restaurants such as Krave Kobe Burger Grill in Glendora, CA, Kobe Steakhouse of Japan in Saint Louis, and Kobe Japanese Steakhouse in Brandon, FL could be forced to change their LLCs and scrap menus and signage. (Owners of those three restaurants didn't respond to requests for comment.)

For some restaurants, the change could be as simple as renaming menu items, a relatively minor and inexpensive adjustment. But many restauranteurs still appear to believe that they are serving legit Japanese-certified Kobe, when they're not. Bamboo Sushi in Portland, for example, features a popular "Kobe Burger" with aged cheddar for $14. Owners may simply need to rename the dish the "Wagyu Burger," then update its menu and website. But Brandon Hill, director of operations, says he believes it's the real thing. "We don't use the word 'Kobe' for our meat unless it is actual Kobe beef from the Kobe prefecture in Japan," he says. It's not certified, according to Kobe Beef Marketing & Distribution Promotion Association.

Farmers face problems, too. Kobe Beef America, for example, could be forced to scrap its decades-old name and label. "What are you supposed to, not call it [its name] after all the money and effort you've put into it? That's a big deal," Freeborn says. In the case of KBA, there may be legal wiggle room, since the company uses the geographic term "America" in its name, he adds. "I don't know the legalities and I'm not spending the money to find out," he says.

The Kobe geographic label could be approved by the end of next month, documents show. It's unclear how aggressive Japan will be about enforcing it. But, at the very least, businesses using the term Kobe should learn what it really means, experts say. "In the past, they may not have known any better. Now they might need to," Gaskins says.