OSAKA — Meat processing firms will continue to increase production in September as sales at Nippon Meat Packers Inc., stung by a beef-mislabeling scam at its subsidiary, Nippon Food Inc., are expected to continue to decline, according to industry sources.
Nippon Meat, better known as Nippon Ham, is the industry leader.
Prima Meat Packers Ltd. and Itoham Foods Inc., which increased meat production in August by between 20 percent and 30 percent from a year earlier, plan to increase output by 20 percent in September, company officials said.
Marudai Food Co. will also keep output levels 10 percent to 20 percent higher in September, in line with August output, company officials said.
The decision stems from expectations that retailers will continue to shun Nippon Ham products amid widespread consumer mistrust following the firm’s defrauding of a government buyback program.
The program was set up to bail out the beef industry after the outbreak of mad cow disease in domestic cattle last September, but Nippon Food passed off imported beef as domestically raised in order to defraud the state out of buyback subsidies.
The Agriculture, Forestry and Fisheries Ministry, which has asked Nippon Ham to restrict beef sales since the mislabeling scam was revealed, is expected to announce next week the results of its investigation into all beef that Nippon Food submitted for the buyback scheme.
Restrictions on beef sales are likely to continue until the ministry confirms the investigation turned up no new problems. As a result, Nippon Ham products are not expected to reappear on supermarket shelves in the near future.
Aeon Co., a major supermarket chain that previously said it would resume selling Nippon Ham products, has now retracted that decision on the grounds that “the investigations into Nippon Ham are insufficient.”
Retail industry officials also said sales of Nippon Ham products are not expected to recover immediately, even if the firm’s products return to supermarket shelves.
“I think it will take at least six months for sales to completely recover,” an official of the Izumiya Co. supermarket chain said.
While meat processors say their increased output is temporary, experts say the companies may consider increasing production facilities if Nippon Ham experiences prolonged sluggish sales.
But the marketing opportunity offered by the Nippon Ham scandal is apparently not benefiting rivals very much in terms of profits.
“It is difficult to produce profits since we are increasing output of many different products that are only produced in small amounts,” a Prima Meat official said.
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