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Japanese Food Co. Seeks Protection

July 3, 2002

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TOKYO (AP) _ Nippon Shokuhin Co., a Japanese food-processing firm hit by a beef mislabeling scandal, filed Wednesday for court protection from creditors.

The company, based in the southwestern city of Fukuoka, is the second Japanese meatpacker to seek protection this year, according to Teikoku Databank Ltd., a private research firm. The first was Snow Brand Foods Co.

Liabilities left behind by Nippon Shokuhin totaled 21.85 billion yen ($180 million), Teikoku Databank official Naohiro Fujimoto said.

Nippon Shokuhin tried to pass off 122 tons of foreign beef _ worth about 136 million yen ($1.13 million) _ as domestic under the alleged scam, the Agriculture Ministry has said.

The meatpacker was allegedly attempting to take advantage of a lucrative government program that buys local meat potentially contaminated with mad cow disease in order to get it off the market.

The latest case followed a similar scandal that toppled Snow Brand Foods. Snow Brand Foods mislabeled foreign beef as domestic and sought bankruptcy protection as retail sales of its food products fell. The scandal also raised questions about corporate ethics and product safety in Japan.

Domestic beef sales have sharply dropped since authorities here reported the first case of mad cow disease outside of Europe in September.

Separately, another food processing firm, Zen-Noh Chicken Foods, has been investigated by prosecutors over mislabeling allegations.

Japan’s government has spent millions of dollars purchasing and disposing of local beef potentially tainted with the bovine brain-wasting illness, which is linked to the fatal human variant Creutzfeldt-Jakob disease.

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