The next episode in the saga of Snow Brand Milk Products, the Japanese company hit by food safety scandals, unfurled yesterday when the company announced that it is to tie up with two agricultural co-operatives and request a capital injection from trading company Itochu Corp to rebuild itself, local media said on Thursday, Reuters reports.
The Nihon Keizai Shimbun said the scandal-smeared dairy products maker would join hands with the National Federation of Agricultural Co-operative Associations (Zen-noh) and the National Federation of Dairy Co-operative Associations (Zenrakuren).
The business daily said the three plan to launch a joint venture as early as this year combining their milk businesses, with each taking an equal stake in the new firm.
The joint venture could market its products under a unified brand, the paper added.
A Snow Brand spokeswoman said the three sides were in talks and a three-way tie-up was under consideration, but nothing final had been decided.
The Snow Brand spokeswoman declined to confirm the report in the Asahi Shimbun newspaper about the capital injection request to Itochu, but said Snow Brand aimed to obtain a capital injection by the end of this month as part of a revival plan. Itochu declined to comment on the Asahi report.
Snow Brand has been struggling to rebuild its image ever since a tainted milk scandal in 2000 sent its sales plunging.Its sales and reputation have taken a further beating since the revelation in January of a beef mislabelling scam at its 65 per cent owned subsidiary, Snow Brand Food, which said last month it would close shop by late April.
Snow Brand Milk shares rose as much as seven per cent in morning trade on the reports and ended Thursday up 5.13 per cent at 164 yen (€1.44).