Japan’s leading but ailing milk products manufacturer Snow Brand Milk Co has announced an alliance with Itochu Corp and its affiliate, Yayoi Foods to promote one another’s frozen food sectors.

The country’s frozen food market according to Snow Brand, worth around ¥8.5bn, is growing rapidly but is also highly competitive. It said it hoped the agreement between the three food processors would give the group a competitive edge over its rivals.

Co-operation is to range from promotion and sales of one another’s products, joint procurement of raw materials, pooling of R&D, to mutual production of products on consignment.

Snow Brand said it will be relying on its extensive nationwide sales channels and global network to promote the other brands. The companies are also considering setting up a joint holding company to merge their frozen food business in the future.

The announcement comes towards the close of a very difficult fiscal year for Snow Brand. Capitalised at ¥27,809m and one of the country’s top ten food processors, it was touched by scandal last summer when found responsible for a widespread food-poisoning outbreak. The company is now facing difficulties regaining its confidence amid protracted damages talks and drastic sales declines.

Snow Brand is to close four factories in addition to announcing the closure of its Osaka plant on 31 January as part of efforts to rationalize operations.

By Michael Fitzpatrick, just-food.com correspondent