Japan's Snow Brand Milk Products Co. Ltd. will likely post a 370 million dollar group net loss in the year to March 2001 after causing a massive bout of food poisoning, a report said Saturday.
The company's group net loss was projected at just under 40 billion yen (370 million dollars) in the aftermath of more than 14,000 people falling ill in late June from drinking the Snow Brand milk, the Nihon Keizai said.
The nation's worst yet food-poisoning outbreak would also incur a consolidated operating loss of 41 billion yen, reversing the operating profit of 20.6 billion yen in the past year to March, it said.
Japan's biggest diary firm was suffering extraordinary losses resulting from a consumer boycott, strangled by costs for disposing recalled products and compensating its retailers.
Snow Brand planned to slash some one-sixth of its current workforce, or 1,000 jobs, through voluntary redundancies in the next three years, the report said.
It will also close down nearly half of its 21 factories nationwide, the newspaper said.
Snow Brand Food Co., the dairy firm's subsidiary and Japan's sixth largest meat packer, would also see its sales sink 10 percent in the next 12 months because of the massive scandal of its parent company, it said.
Snow Brand Milk Products on August 16 unveiled its first losses in five decades, and said sales crashed 20.4 percent year-on-year in the four months to July to 147.4 billion yen (1.4 billion dollars).
And in late August, credit appraiser Standard and Poor's downgraded Snow Brand Milk's debt to junk-bond status, cutting its rating to a predominately speculative BB, from the minimum investment grade BBB.
Snow Brand's Osaka plant in western Japan has been closed indefinitely since suspicion first fastened on its bacteria-tainted milk produced in unhygienic conditions.
Suspicion then spread to the firm's plant at Taiki in Hokkaido, northern Japan, after the local government found traces of harmful bacteria in skim milk produced at the plant and supplied to the Osaka dairy -- TOKYO(AFP)
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