Snow Brand's Unethical Practices at Japan


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Case Details:

Case Code : BECG039
Case Length : 18 Pages
Period : 2000 - 2004
Pub. Date : 2004
Teaching Note : Available
Organization : Snow Brand Milk Products Co. Ltd.
Industry : Food
Countries : Japan

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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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...

Food Poisoning

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. The victims suffered from diarrhea, stomach pain and vomiting and some of them needed to be hospitalized after consuming low fat milk produced on June 23, 2000 and June 24, 2000 at Snow Brand's factory in the Miyakojima Ward in Osaka. Immediately after the incident, the Osaka Prefectural Board of Education instructed schools not to serve children milk that was produced in the Osaka factory...

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. However, only beef from domestic cows slaughtered prior to October 18, 2001 qualified for the program as that was the date when testing of all beef for BSE began. On January 23, 2002, Yoichi Mizutani, the president of Nishinomiya Reizo a warehouse company contracted by Snow Brand Food, told Mainichi, a Japanese newspaper, that on the instructions of Snow Brand Food officials, in October 2001 it had repacked Australian beef into boxes labeled as domestic beef...

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