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Friday, 22 February, 2002, 07:12 GMT
Tainted Snow Brand shuts up shop
Snow Brand Foods president Koshiro Iwase and executive Katsuhiko Kuroda
The firm had hoped to keep its food unit going
Snow Brand Food, the meat processor mired in a beef-labelling scandal that rocked Japan, has said it will shut down by April.

Parent company Snow Brand Milk Products said it would give 25bn yen (131m; $186m) in financial support to the meat-packing unit to help with losses from the liquidation process.


As the parent company, what happened was a disappointment, but we saw no other way to rebuild our tarnished brand image

Haruhiko Okada, Snow Brand Milk

Snow Brand Food suffered an almost complete collapse in customer confidence, after last year admitting mislabelling beef in order to qualify for government hand-outs related to the current BSE scare.

Investigations into Snow Brand's meat plants subsequently uncovered a series of other scandals and cover-ups, causing its sales to fall by 85% and its parent company's shares to lose two-fifths of their value.

"We feel utmost regret over the scandal that led to a series of cancellations from clients and no foreseeable recovery in our sales," Snow Brand Food President Koshiro Iwase told a news conference.

Revival hopes dashed

Snow Brand Milk, Japan's largest dairy products maker, had previously promised to rebuild its meat-packing unit, but now says the decline in sales has made that impossible.

"As the parent company, what happened was a disappointment, but we saw no other way to rebuild our tarnished brand image," Snow Brand Milk Vice President Haruhiko Okada said.

He described the impact of the planned liquidation as immense.

The company said it would unveil a revamped revival plan by the end of March, by which time its meat subsidiary ought to have been closed down.

Snow Brand Milk said it would fund the 25bn yen aid through the sale of assets and businesses.

What is not yet clear is whether the firm has made any progress in its stated aim of searching for a foreign strategic partner to inject cash into the business.

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 ON THIS STORY
The BBC's Lesley Curwen
"Political sympathy for the group's plight has been limited"
See also:

08 Feb 02 | Business
Snow Brand scandal mounts
28 Jan 02 | Business
Another beef scandal hits Japan
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