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TOKYO: Nissin Food Products Co., one of Japan’s
leading food companies, announced Wednesday it was pulling out of a
high-profile merger involving the group that imported Chinese-made
dumplings containing pesticide.
Nissin, famous for pioneering
instant noodles in the 1950s, is the biggest indications yet of the
fallout to business of the health scare shaking Japan.
Thousands of Japanese have
complained of illness, with 10 diagnosed with pesticide poisoning,
after eating frozen meat dumplings, which had been made in China and
sold by a unit of Japan Tobacco Inc. (JT).
JT, looking to branch out amid
dwindling tobacco sales, agreed in November to merge its frozen food
business with Nissin Food.
But Nissin Food said its board
decided to cancel the integration with the now scandal-tainted
tobacco giant.
“When food poisoning takes
place, it is a universal rule that food makers should immediately
take action, such as a recall,” Nissin Food President Koki Ando
told a news conference. “But there seems to be a fundamental
difference between us and JT about food safety issues,” Ando said.
The tobacco company has been
denounced for waiting one month to reveal the pesticide discovery,
saying it needed time to verify that customers’ illnesses were
linked to the dumplings.
JT President Hiroshi Kimura said
that he would reflect “seriously” on the criticism.
“From the bottom of my heart, I
apologize for causing concerns about food safety,” he told a
separate news conference.
Under the proposed deal, JT last
year bought major frozen maker Katokichi Co. Ltd in a friendly
$1-billion takeover. Nissin was then supposed to buy a 49-percent
stake in Katokichi from the tobacco company.
Kimura said Japan Tobacco was
still ready to run Katokichi and turned down an offer from Nissin to
take the majority stake.
“Considering the situation
triggered by our frozen food products, the three companies agreed to
decide on the cancellation,” Kimura said.
China has been hit by a string of
scandals over its products, raising fears for the massive
manufacturing industry behind the nation’s soaring growth.
The government in Tokyo has
demanded that China and Japanese importers pay closer attention to
safety following the scare, which has dominated headlines for the
past week.
--AFP
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