Japan Tobacco and Nissin Food Products Co. have ripped up plans to merge their frozen food businesses amid claims that ten Japanese have fallen ill after eating poisoned Chinese dumplings sold by the cigarette maker.
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Japanese police are investigating allegations of a link between the dumplings, imported from China by Japan Tobacco, and the illnesses, including that of a five-year-old who is said to have become critically ill after eating the products.
The food scare has provoked widespread media coverage in Japan and today (6 February) prompted Japan Tobacco and Nissin to announce their planned frozen food deal had been scrapped.
In November, the two sides agreed to team up to buy local frozen foods group Katokichi Co., which they would then merge with their respective frozen foods units.
Japan Tobacco, the world’s third-largest cigarette maker, was to take a 51% stake in the merged business in a bid to boost its presence in the country’s food sector.
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By GlobalDataHowever, the dumplings scare led Nissin to demand it take majority control of the venture, a move blocked by Japan Tobacco.
“We felt there were differences between JT and us on the issue of safety,” Nissin president Koki Ando told local reporters.
“We wanted to take the lead on safety and do so from a position of responsibility, but JT wanted to be responsible so our proposal was knocked back.”
Japan Tobacco said it would press on with its bid to make Katokichi a wholly-owned subsidiary of the company.
