Snow Brand's Unethical Practices at Japan



Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

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Introduction

In 2000, Snow Brand Milk Products Co. Ltd., (Snow Brand) the largest dairy products manufacturer in Japan was in trouble.Following food poisoning after consumption of its products in June 2000 and other related scams, its sales started to decline and for the first time since its incorporation in 1950, it posted an operating loss on a year-on-year in the financial year 2000-01(Refer to Exhibit I).

Later in January 2002, it was discovered that Snow Brand Food Co. Ltd, (Snow Brand Food)a subsidiary of Snow Brand, had defrauded the government to obtain subsidies under a program intended to help the ailing domestic beef industry in Japan....

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In addition, they destroyed the trust and confidence that consumers had in Snow Brand and its products.This was demonstrated by the refusal of major supermarket chains and stores to sell any of its products. Snow Brand had to ultimately dissolve Snow Brand Food, as it could not be rehabilitated. Subsequently, the company announced major disinvestment and restructuring plans in an effort to make Snow Brand profitable again. These plans included, selling a part of or its entire stake in some of its subsidiaries and laying off employees.....

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