020265 Scandal Finally Closes Japanese Meat Company

Tokyo - A Japanese meat packer caught in a mislabeling scandal that has raised consumer worries about mad cow disease will close, putting most of its 945 workers out of work, its president said.

The directors of Snow Brand Foods, Japan's sixth-biggest meat packer, decided to liquidate the company after its sales and share price showed no sign of bouncing back from revelations that the company deliberately passed off Australian beef as Japanese.

The scandal broke just as Japanese authorities were trying to reassure consumers that they had tightened inspection and labeling requirements for meat in response to a recent outbreak of mad cow disease.

The company's president apologized Friday for the events that led to the decision to shutter the 52-year- old meat packer — an extremely tough one in a country where workers once took lifetime employment for granted.

"I feel as if my heart has been broken when I think of the workers and their families who had nothing to do with the scandal," President Koshiro Iwase told a news conference.

"We are painfully aware of our responsibility for losing the public's trust in meat labeling."

Japan's chief government spokesman described the development as rough justice.

"It was the penalty that the company had to pay for betraying consumers' confidence," Chief Cabinet Secretary Yasuo Fukuda said at another news conference.

Japan reported Asia's first case of mad cow disease in September and since discovered two more cows infected with the brain-wasting disease.

Beef sales have plunged and some restaurants make a point of telling customers that they serve only imported meat.

Snow Brand Foods abused a system under which the Japanese government earmarked millions of dollars to buy up and dispose of older domestic meat kept in storage.

The scandal was another blow to the reputation of the meat packer's parent, a dairy products conglomerate that was blamed for producing tainted milk that caused the country's largest case of food poisoning in July 2000.

The backlash by consumers and retailers against Snow Brand Foods battered its sales and share price, forcing executives to give up initial plans to reorganize its operations.

Japanese supermarkets pulled Snow Brand beef from their shelves, and schools stopped using it in school meals.

The bill for dissolving the company, 65% of which is owned by Snow Brand Milk Products, could reach 25 billion yen ($186 million), officials said.

Last month, then President Shozo Yoshida resigned to take responsibility for the deception, and Japanese police are reportedly building a fraud case against the company.

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