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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BECG039) click on the button below, and select the case from the list of available cases:
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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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"This food poisoning incident is one of the biggest caused by such a big-name company."
- Health and Welfare Ministry Task Force, Government of Japan, July 10, 2000.1
"The crime was vicious in that the company abused the government program as an entity to gain nearly 200 million yen. The crime betrayed the public's trust in the industry."
- The Presiding Judge, Akiyoshi Sasano ruling against five former employees of Snow Brand Food Co.2
Introduction
In 2000, Snow Brand Milk Products Co. Ltd., (Snow Brand) the largest dairy products manufacturer in Japan was in trouble.
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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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These incidents caused irreparable damage to the reputation and finances of the company.
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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. |
Snow Brand's Unethical Practices at Japan
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