Japanese food processor Nichirei said yesterday [Tuesday] that it expected a recall of frozen spinach to depress its revenue in the current business year ending March 2003 by some ¥1.6bn (US$13.0m).
The company discovered excessive residues of agricultural chemicals in frozen spinach it had imported from China, leading it to recall significant volumes from retailers in June this year.
The recall will also lower the group’s recurring profit by ¥550m, including the costs of destroying the spinach still in storage. Nevertheless, Nichirei upped forecasts for its group recurring profit for the year in progress to ¥15.3bn from the earlier announced ¥14.4bn. Sales forecasts remained steady at ¥579bn despite the spinach recall since improved sales of beverages and other frozen products to wholesalers had offset the loss.
Nichirei revised group net profit estimates down from ¥7.2bn to ¥6bn, meanwhile. This was attributed to exception charges incurred by the parent company.