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Japanese Meat-Processing Firm Sues Troubled Snow Brand - 2002-02-15


In this week's business headlines from Japan, a meat-processing firm sues the troubled Snow Brand Food company and a leading fast-food chain trims its earnings outlook.

Japan's Snow Brand Food company, currently embroiled in a meat-labeling scandal, is in the headlines once again for intentionally misleading the public and officials on the origins of its beef. Last month, Snow Brand admitted to repackaging foreign meat as domestic to profit from government subsidies meant for companies hurt by public fears over mad cow disease.

Now, a meat processing company has filed suit against Snow Brand, accusing it of falsely labeling meat produced in Northern Japan as coming from the south. Consumers are concerned about eating beef from cattle in Northern Japan since the country's first case of mad cow disease was found there last September. The illness has been linked to a fatal human brain disease.

A group of farmers has also expressed indignation at Snow Brand. They came to Tokyo and protested at Parliament and at Snow Brand's headquarters, asking the firm's president to apologize for damaging the reputation of the Japanese beef industry.

The sharp drop in beef consumption has hurt earnings for Yoshinoya, the largest beef and rice fast-food chain in Japan. The company has slashed its full-year profit forecast by about 20 percent and now expects a net profit of 35 million dollars.

Yoshinoya's president, Shuji Abe, told reporters that "the fallout from the discovery of mad cow disease in Japan was larger than he expected."

There is brighter corporate news in Japan's automobile sector. The country's third-biggest auto-maker, Nissan, has unveiled a plan to rehire some employees who were laid off as part of the firm's drastic restructuring plan which began in 1999.

Nissan says that 1,000 workers will be hired starting in April to work in areas such as technology and engineering. They will include former employees. The move is in sharp contrast to most other Japanese companies, which are announcing more layoffs to counter the effects of recession.

Next week, Microsoft's popular video game console, X-box, will debut on the Japanese market, one of the world's largest markets for video games.

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