Kao faces ¥10 billion hit over recall

Kyodo, Bloomberg

Kao Corp. President Michitaka Sawada says his company expects consolidated sales for the business year through December to fall about ¥10 billion due to the recall of skin-whitening items produced by group company Kanebo Cosmetics Inc.

That includes sales of ¥5 billion that the company had expected from products subject to the recall ordered after Kanebo’s skin-whitening cosmetics were reported to cause serious symptoms, such as white blotches on skin.

“The sale of our whitening products will fall in the second half. Our reputation was hurt,” Sawada said Tuesday.

The figure also incorporates a projected decline in sales to consumers shunning Kanebo products after the recall.

“We’d like to assess the long-term effects by monitoring developments in the next few months,” he said.

Kao is still assessing how much damage it will face from the product recall that caused “depigmentation” to more than 2,000 people in Japan. The company plans to compensate customers and it hasn’t decided on the amount, said Sawada, who apologized Tuesday to the affected people.