Farm ministry officials on Monday afternoon questioned executives of Nippon Meat Packers Inc., better known as Nippon Ham, in connection with a beef-mislabeling scam involving one of its subsidiaries.

The questioning of Motoaki Shoji, senior managing director at Nippon Ham, and Heihachiro Azuma, vice president of the company, follows searches carried out on sales offices of Nippon Food Inc., a wholly owned subsidiary, for evidence of abuse of a beef-buyback program to obtain government subsidies.

Azuma serves as president of the subsidiary, which Nippon Ham President Hiroji Okoso has admitted had passed off imported beef as domestic and sold it to the buyback program intended to bail out the domestic cattle industry battered by the outbreak of mad cow disease in Japan last September.

Nippon Ham, Japan's largest meat packer, has claimed that the heads of three sales offices, in Ehime, Tokushima and Hyogo prefectures, are responsible for the deception.

Nippon Food employees passed off at least 1.3 tons of imported beef as domestic to make it eligible for the buyback program, according to Okoso.

Officials at the Agriculture, Forestry and Fisheries Ministry have said the government is considering filing a fraud complaint against the subsidiary or the parent firm.

The government is also considering bringing a separate complaint against Nippon Ham for allegedly destroying evidence related to the fraud.

Under the subsidy program, the government allowed several licensed industry bodies to buy domestic beef processed before a nationwide mad cow disease-testing regime was introduced last fall. The industry bodies acted as a channel for official subsidies.

The program, which reportedly cost 29.3 billion yen, was designed to prevent any questionable beef from reaching consumers and to cover losses incurred by meat processors and wholesalers hit by the outbreak of the brain-wasting illness.

The scare dented not only sales of domestic beef but those of imported beef, causing stocks of imports to pile up at processors and wholesalers.

In January, Nippon Ham sold a combined 938 tons of beef, including the 200 tons from Nippon Food, to one of the industry bodies, the Japan Ham & Sausage Processors Cooperative Association.

The 200-ton portion included the 1.3 tons of imported beef that is at the center of the ministry's investigation.

The parent company said Nippon Food detected the deceptions through an internal probe conducted from February to May. It was apparently prompted by revelations in January of a similar scam at Snow Brand Foods Co., a unit of Snow Brand Milk Products Co. that was disbanded in April.

Okoso told reporters on Friday that Shoji and Azuma were aware of the scam as early as February.

Shoji decided "by himself" to hide evidence of the fraud after learning of it, Okoso claimed.

Shoji then asked the industry association to allow Nippon Ham to cancel a sales contract that had been concluded, saying the meat did not qualify for the subsidy program because its use-by dates had expired.

The contract was canceled July 12, and the industry body returned the imported beef to Nippon Ham, which incinerated it July 19.

Nippon Ham allegedly destroyed the beef after it learned ministry inspectors planned to verify the origin of production of all beef sold to the association.

The scandal has rattled consumers, retailers and investors, with shares in Nippon Ham plunging as many major supermarkets and department stores moved quickly to pull its products from their shelves.

Farm ministry officials plan to search the offices of the Japan Ham & Sausage Processors Cooperative Association on Tuesday to determine if it was involved in the scam, because Nippon Ham Chairman Yoshinori Okoso, father of Nippon Ham President Okoso, heads the association.

Nippon Ham President Okoso also serves as a board member of the association.

Public still wary of beef

SYDNEY (Kyodo) Exports of Australian beef to Japan have been slow to recover as consumers remain wary of eating beef in the wake of last year's outbreak of mad cow disease, an industry group said Monday.

Australia exported 21,739 tons of beef to Japan in July, up 11 percent from June, according to the latest weekly report issued by Meat and Livestock Australia.

This figure still constitutes a 25 percent decline from a year earlier, suggesting that consumption of Australian beef in Japan is still sluggish.

Beef consumption in Japan tumbled dramatically following the discovery of bovine spongiform encephalopathy, popularly known as mad cow disease, in September.

As a result, Australia's beef exports to Japan suffered a severe blow.

Australia is hoping that a price war in the Japanese fast-food industry will benefit its beef exports, as roughly 80 percent of Japan's hamburgers are made with Australian beef, according to the MLA.

In July, the MLA said that the Australian beef industry will spend 16 million Australian dollars (around 1.056 billion yen) on a campaign to revive sales in the Japanese market over the next 12 months.