Wednesday February 6, 02:10 AM
JT, Nissin abandon plan to integrate frozen food business
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TOKYO (AFP) - Japan Tobacco Inc and Nissin Food Products Co. have abandoned a planned merger of their frozen-food businesses amid a national scare over China-made dumplings, company officials said Wednesday.
"Today in our board meeting we decided to cancel the integration of the frozen-food business with Japan Tobacco (Berlin: JAT.BE - news) that we had announced on November (Frankfurt: A0S9N7 - news) 22," Nissin Food said in a statement.
The decision was influenced by trouble over pesticide-tainted frozen dumplings made in China and imported to Japan, a spokesman for Nissin Food said.
"After the problem of the pesticide-tainted dumplings, we began to discuss reviewing the issue of food safety with our business partner (Japan Tobacco), but couldn't narrow a gap in our opinions on this issue," the spokesman told AFP, adding that further details will be released at a news conference.
Separately, Japan Tobacco will hold a news conference on the cancellation of the planned integration with Nissin of their frozen-food businesses, said a spokeswoman for JT.
Thousands of Japanese have reported falling ill after eating the frozen meat dumplings, with at least 10 people requiring hospital treatment and major food companies recalling their products.
A large part of the dumplings that made people ill were sold by the frozen-food unit of the Japanese tobacco giant.
The governments of Japan and China have agreed to cooperate in investigating how the dumplings were tainted with pesticides. Japanese police reportedly suspect pesticides was added or got mixed up during the packing of dumplings into plastic bags at a plant in China.
Under a preliminary agreement reached in November, JT was to turn leading frozen-foods firm Katokichi Co. into a wholly owned subsidiary and then sell a 49 percent stake to Nissin, paving the way for the three companies to consolidate their frozen-food operations. JT currently holds a 94 percent stake in Katokichi.
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