Snow Brand Foods to be liquidated
liquidate its operations by late April as sales continue to plunge
following recent labelling scandals.
Japanese meat processor Snow Brand Food has announced plans to liquidate its operations by late April as sales continue to fall following recent labelling scandals, reports Japan Today.
Growing levels of outrage at the labelling scandals have done nothing to boost consumer confidence in the company, whose parent company Snow Brand Milk Products is itself still recovering from a scandal over tainted milk two years ago. Snow Brand Milk Products is to give 25 billion yen in financial support to the meat processor to help with expected losses from the liquidation process.
Snow Brand Food, which is 65 per cent owned by Snow Brand Milk, caused public outrage after it admitted to intentionally mislabelling beef in order to claim government subsidies aimed at helping the industry following an outbreak of mad cow disease in Japan.
Snow Brand Milk had said earlier this month that it would rebuild its meat-packing unit, but the decline in sales has forced Snow Brand Food to decide to shut down its operations by the end of March ahead of a meeting with investors at the end of April.
Sales of Snow Brand Food are reported to have dropped by about 80 per cent since the scandal.
After the liquidation announcement, the Tokyo Stock Exchange said shares of Snow Brand Food would be delisted from the exchange's second section on May 23.
Shares of the parent closed this morning down 10.42 per cent at 129 yen, down more than 40 per cent since the scandal broke.
Snow Brand Milk, Japan's largest dairy products maker, said in February that it was seeking an outside alliance, including a possible capital injection, as part of a new restructuring plan.
