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Japan's 'Snow Brand' Food Company Admits to Fraud - 2002-01-24

Investigators searched the headquarters of Japan's Snow Brand food company Thursday after it admitted committing fraud. The scandal may prove to be a critical blow to the group, which is the country's largest maker of dairy products.

In a widely televised news clip, Snow Brand Food President Shozo Yoshida bowed deeply Wednesday as he asked the Japanese public to forgive his company. He says he "regrets that this incident happened and deeply apologizes to everyone."

The group confirmed this week that it had re-packed imported beef as a domestic product to cut inventories and receive government subsidies.

The incident comes as the nation's cattle farmers and food companies are trying to recapture public trust after mad cow disease was discovered in Japan last year. Despite government assurances about the safety of Japanese beef, sales have slowed dramatically. Humans who eat the meat of sick cattle can contract a variation of mad cow disease, a fatal, brain-wasting illness.

The government offered subsidies to help companies hurt by the mad cow scare, and Snow Brand was hoping to collect payments.

Japanese government spokesman Yasuo Fukuda called Snow Brand's actions inexcusable, and said they could heighten public fears.

The scandal is an additional blow to Snow Brand. The dairy-product company was found responsible for Japan's worst outbreak of food poisoning on record. About 200 people became sick and one person died after consuming contaminated Snow Brand milk products nearly two years ago.