Snow Brand's Unethical Practices at Japan




Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

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Excerpts

Unethical Practices

Since June 2000, Snow Brand has been facing many problems. The company's problems started with food poisoning caused by its contaminated milk products. Subsequent investigations conducted by the government revealed many other alleged unethical practices inside the company. The company was also accused of tampering with evidence and attempting to cover up its violation of Food Sanitation Laws in Japan...

The first of the alleged unethical practices that came to light was food poisoning. On June 27, 2000 people from Osaka, Wakayama, Hyogo, Nara, Kyoto, Shiga, Okayama and Hiroshima prefectures in Western Japan, began to complain of illness after consuming Snow Brand's low fat milk.....

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From Frying Pan to Fire: The Beef Scam

In Japan, after a cow was found to be infected with Bovine Spongiform Encephalopathy (BSE) in September 2001, people were scared of contracting the human form of BSE through contaminated meat. Thus, beef sales declined and the beef industry faced heavy losses.In order to help the suffering beef industry, the government started a buyback program under which government subsidized industry groups bought beef from meat processing companies. The beef bought through the program was destroyed by the government to make sure that it was not resold...

Rehabilitation and Restructuring

Starting with the food poisoning in June 2000, Snow Brand had suffered many blows, which resulted in loss of reputation, loss of public trust in their products and financial losses.Accordingly, to rehabilitate, it decided to undertake major restructuring and disinvestment of its holdings. Snow Brand drafted a rehabilitation program that featured a 90 per cent reduction in capital and financial assistance from major creditor banks such as Norinchukin Bank, UFJ Bank and Mizuho Corporate Bank.....

The Judgement Day

On November 22, 2002, the Kobe District Court ruled that five former Snow Brand Food executives, including Hatakeyama, were guilty of fraud. The court believed that they conspired with Hiromi Sakurada (Sakurada), former senior managing director and Masami Inoue (Inoue), former managing director of Snow Brand Food to commit the fraud.All five of them were sentenced to two years in jail but these jail terms were suspended. This meant that they did not have to spend any time in jail but it would be on their permanent record.....

Exhibits

Exhibit I: Consolidated Statements of Income Snow Brand Milk Products Co., Ltd., and its Consolidated Subsidiaries
Exhibit II: Snowbrand Subsidiaries


 

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