Japan's embattled Snow Brand Milk company on Tuesday unveiled restructuring plans to recover from a beef-labeling scandal at its main food subsidiary. The firm also says that all of its units will take steps to improve legal compliance.
Snow Brand Milk company, a well-known but scandal-tainted name to Japanese consumers, said Tuesday that it may seek outside business partners to raise cash.
However, the company denied reports in the local media that it would dissolve subsidiary Snow Brand Foods. Company officials have admitted that workers placed false 'Made in Japan' labels on Australian beef. Their aim was to receive government subsidies intended for domestic meat products that might have been contaminated by mad cow disease. The illness, which has been tied to a fatal human variant, was detected in Japanese cattle in September and all but wiped out beef consumption in the county.
Snow Brand Milk President Kohei Nishi said at a news conference Tuesday that the company's lenders still are offering support, but also said he is in talks with several companies about forming a business tie-up that could lead to a capital infusion. He apologized for creating problems for Japanese consumers and said he would strengthen legal compliance within the group.
Company officials acknowledge that the scandal will hurt earnings for the next fiscal year, and that parent company Snow Brand Milk will probably declare an annual loss of $180 million.
The company is still trying to recover from a food poisoning incident less than two years ago that sickened more than 13,000 people.