Dumpling recall hits world’s number three tobacco company

Posted by: Ian Rowley on January 31, 2008

With governments around the world tightening anti-smoking legislation and health conscious Japanese smoking less than they once did, Japan Tobacco’s plans to bolster its $2.7 billion a year food biz sound like a safe bet on paper. Yet, just months after inking a $1 billion deal to acquire Katokichi, Japan’s largest frozen foods producer, a delivery of pesticide-contaminated frozen dumplings sent JT’s stock price tumbling today to its lowest level since March 2007 and cooked up a slew of bad publicity.

According to reports in Japan, two of JT Food’s gyoza dumpling products imported from Chinese supplier Tianyang Food have been found to be tainted with a phosphorus-based insecticide, causing at least 10 cases of food poisoning. The victims included five members of one family, who suffered bouts of diarrhea and vomiting after eating the dumplings, which contained traces of an organophosphate called methamidophos. The family were admitted to hospital after their five-year-old lost consciousness.

Today, as the local media weighed in, Japan’s health ministry announced the names of 19 firms, including JT, which imported products other than dumplings from Tianyang Food and urged firms to stop selling their products. Health minister Yoichi Masuzoe called the issue a “life threatening matter.”

Aside from the embarrassment factor, the scare is doubly bad for JT. Its frozen food biz taps China for about 20% of its products. Meanwhile, Katokichi, which JT bought with Nissin Foods and will integrate into its business in April, also relies on China for similar chunk of its supplies.

For all that, the cynic in me suspects that if any company is in a good position to handle the fallout from a poisoning scare—or even future lawsuits—it’s probably JT, whose tobacco business ranks behind only Phillip Morris and British American Tobacco. After all, its mainstay products, cigarette brands such as Camel and Mild Seven, have been doing much the same for decades.

Reader Comments

albert wong

January 31, 2008 5:16 PM

When Chinese will learn to make safe and reliable products?

blue

January 31, 2008 11:45 PM

Don't blame China, it's your desire for cheaper and cheaper products that drives some guys to make unreliable goods. Toyota also recalls the their cars, why not criticize them? If you do have anti-Chinese sentiment, please don't buy Chinese goods, and see how long and how well you can live without Chinese goods.

Haav Bline

February 1, 2008 2:33 AM

Typically tens and hundreds of suppliers of suppliers in China compete for purchase orders of any kind of products. If the foreign purchasors only care about maximizing their own profit and do not care about the quality of products they sell, they can seemly choose the lowest bidder, the poor quality will be the result froo this process.

In this case, if JT sells the products in their own brand, then they should take full responsibility of the quality of the product by conducting thorough quality control.

Katie Leung

February 1, 2008 6:58 AM

Consider this, China export accounts for trillions of dollars (yes not billions now), so imagine the amount of export, and as people who work in manufacturing may know, there is always a possibility for flawed, faulty products, I don't think there can ever be 100% perfect of anything. Even Honda makes some recalls to their cars because of the brake problems, Sony recalls battery scandals. Japan's food industry has its own problem too, the Japanese confectioners mislabelled the expiry dates on the packages.

Ray Wang

February 1, 2008 9:13 AM

Chinese are more more caring about the quality of their products. they just need the time to transfer, it is a process. sooner or later, Made in China will also mean good quality just like what Japan did before.

Katie Leung

February 1, 2008 11:33 AM

These are the quotes from CNN


"Japanese health officials found the insecticide only in the dumplings eaten by those taken ill, but not in other dumplings from the same batches"


"Japan in recent months has been hit with its own domestic food safety scandals involving recycled red bean filling, mislabeled meat and the use of outdated milk, cream and eggs in a popular brand of cream puffs"

Ben

February 1, 2008 12:00 PM

It has been reported that no pesticide has been found in the remaining products of the same batches in China, and two countries have agreed to investigate further before giving any subjective judge.

Katie Leung

February 1, 2008 3:13 PM

Another quote from CNN

"Heightening the scare, investigators said they found a tiny hole in a dumpling bag recovered from a sickened family, suggesting the food may have been deliberately contaminated, said Kenichi Mizuno, a police official in Hyogo prefecture where three people were hospitalized"

Takashi Mazomi

February 3, 2008 1:47 AM

Just admit it, the Chinese have been extremely irresponsible for the safety of their products.

As a socialist government, they must ensure the quality and risk-factors of their products.

This is why China is a second-world country, unlike first-world Japan. The Japanese a lot more in R&D, health regulation, etc.

Katie Leung

February 4, 2008 9:53 AM

China is taking this dumpling case very seriously. She already sent a team of experts to Japan to investigate the case.


http://www.chinadaily.com.cn/china/2008-02/04/content_6439512.htm

Lincoln

February 4, 2008 4:23 PM

It's very possible that the competitor of this food company or some person who hate China (such as Japanese right winger)set up this trap and try to destroy the China's reputation.

David King

February 4, 2008 6:50 PM

It is so strange that everytime something bad involved China happened, some people always critcize so-called "anti-China" force without analyzing the real issue first.

It reminds of Hillary Clinton always blames far-right conservatives for her husband's wrongdoings and corruptions.

The comparison of Toyota vs Chinese food
supplyer in this case is so odd.
I wonder where has Blue been living for the last 40 years. The reason that US Big 3 auto makers are in the retreat is their bad quality record.

Now Toyota is the market leader. If they
keey recalling their cars, their reputation will suffer and people will start buying card manufactured by Korea or even China.

Edmontonian

February 4, 2008 7:37 PM

Referring to Takashi Mazomi's statement:
Every nation goes through a stage of early development before emerging to be economic powerhouse. In a short 10 years, Chinese products as a whole have been improving at a rapid speed.
In the 50s and 60s, japanese cars were referred as Tin Cans and there were cases that their doors flying away in the middle of highways. Were the Japanese "had been extremely irresponsible for the safety of their products"?
If all Japanese have a superior complex like Takashi Mazomi, they will in not time slide to a third world nation for failing to adapt to the newly emerging world economy.

Katie Leung

February 5, 2008 11:11 AM

Dumplings poisoned 'on purpose'


http://news.bbc.co.uk/2/hi/asia-pacific/7228154.stm

An Adaptive Canadian

February 5, 2008 11:20 AM

For Takashi Mazomi:
Japan is on her way to be a third world nation for the following reasons:
1) Japan's policy of sucking up to the big brother USA and looking down on her Asian neighbors disables herself to adapt to the emerging Asian economic powers.
2) Aging population and racist immigration policy ensures shrinking population, which reduces internal consumption. Export to USA keeps her afloat for a while until USA goes into recession and decline.
3) Japan is in an economic depression since the late 80s. Recently, the emerging Asian economy helps to lift her up a little bit. If Japan keeps up with her superior complex, combining with her unforgivable wartime savage acts to her neighbors, pretty soon she will be casted aside.

HanTang

February 15, 2008 12:17 PM

The investigation report just came out. The finding was, the poison source was the Japanese retail store. Let's see how these readers who jumped on the gun and western media would even mention the investigation findings.
Some people like Albert Wong (I assume he is a Chinese) just disgust me.

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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