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More Bad News for Japan's Snow Brand Company - 2002-02-24

One of Japan's biggest household brands finds itself in new trouble. The Snow Brand company, the country's largest dairy, says its scandal-plagued meat-packing firm will go out of business. At the same time, the company is apologizing for another embarrassment.

In a scene that has become familiar to television viewers in Japan, Snow Brand officials were again before the cameras bowing deeply in apology.

A Snow Brand official at the company headquarters in Sapporo says the firm seeks its customers' understanding after acknowledging it altered expiration dates on butter. The company then used hundreds of tons of the old product to make ice cream and processed milk.

While government officials say the company did nothing illegal, in the eyes of consumers it is the latest example of deception by a prominent household brand already tainted by scandal. The company's problems date back to the summer of 2000 when it was the source of a food-poisoning incident.

Snow Brand has also announced it will liquidate its meat-packing subsidiary. The unit saw its products shunned by consumers and retailers after it admitted deliberately mislabeling beef to take advantage of government subsidies aimed at helping the meat industry after an outbreak of mad cow disease here.

The move to shut down Snow Brand Foods in April raises investor concerns about whether the parent company, Japan's largest dairy, can survive. On Friday, credit-rating firm Moody's downgraded Snow Brand's long-term credit and warned further downgrades could follow.

Snow Brand Milk has outstanding bonds totaling about $450 million. Media reports say its next repayment of approximately $75 million, is due at the end of March.