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Snow Brand labelling scandal grows

TOKYO, Japan (Reuters) -- Japan's troubled Snow Brand Food Co Ltd, already hit hard by a meat-labeling scandal involving beef, has also falsely labeled imported pork as domestic meat, a company official said Saturday.

Japan's sixth-largest meat packer has already seen its shares fall sharply since admitting last month that it had labelled Australian beef as Japanese to take advantage of a government buy-back scheme following an outbreak of mad cow disease last September.

The scandal has also hit its parent firm, Snow Brand Milk Products Co Ltd, which has been struggling to rebuild its own image following a food-poisoning scandal that sickened some 10,000 people in 2000.

Meanwhile, Kyodo news agency on Saturday quoted informed sources as saying Snow Brand Milk, Japan's largest dairy producer, might be considering an alliance with three other domestic dairies.

The three dairies named were the National Federation of Agricultural Cooperative Associations (Zenno), the National Federation of Dairy Cooperative Associations (Zenrakuren) and Kyodo Milk Industry Co, the sources were quoted as saying.

A spokeswoman for Snow Brand Milk declined to comment.

The Mainichi Shimbun daily said Agricultural Ministry inspectors had found that the mislabeling practice may have gone on for up to four years.

It added that the imported meat was sold in line with the higher prices commanded by domestic meat.

The Snow Brand official confirmed that the meat had been sold at higher domestic prices but said that the firm's data showed the practice had only gone on since last June.


Snow Brand said it had been told by the Agriculture Ministry to tighten its labeling practices and apologised im a statement issued on Friday.

"We would like to deeply apologize for damaging trust in food administration and inviting the mistrust of consumers," it said.

Japanese police raided several Snow Brand Food offices, including its Tokyo headquarters, last week in connection with the scandal, which has sparked public outrage and prompted many stores to pull Snow Brand meat products from their shelves.

Snow Brand Milk, which owns 65 percent of Snow Brand Foods, has also taken a beating, with its shares at one point having lost more than half their value in two weeks since the scandal first broke.

The firm also said last week that it would probably abandon its goal of edging back into the black in the next business year starting in April.

But shares recovered slightly following a report on Thursday that giant trading house Itochu Corp was willing to support the company, which is Japan's largest dairy products manufacturer.

The Mainichi Shimbun quoted an unnamed Itochu executive as saying Itochu would be willing to consider extending support to the company if asked. An Itochu spokesman declined to comment.

Snow Brand Milk ended Friday trade up 15 yen, or 13.64 percent at 125, adding to a 5.77 percent rally on Thursday.

Snow Brand Food shares also rallied, rising by 14 yen or 48.28 percent, to close at 43.




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