Japan’s third-largest dairy producer, Snow Brand Milk Products Co., announced today (27 January) that it would be reabsorbing dairy maker Nippon Milk Community Co. in October.
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Following a massive drop in sales and mass rejection of the Snow Brand brand seven years ago, Snow Brand spun off its milk business to create Nippon Milk in 2003 in the hope of reclaiming sales.
“We aim at the reorganisation of the company and the maximisation of any synergy effect after a joint holding company is established. We then aim at advancing to an amalgamation at the early stages,” Snow Brand said.
Snow Brand had scaled down its operations after a food poisoning scare caused by its milk in 2000 and the revelation of systematic false labelling of beef by subsidiary Snow Brand Food Co. in 2002.
Combined sales for the two firms stood at JPY506.3bn (US$5.67bn) in the year ended 31 March 2008.
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By GlobalDataUnder pressure from falling demographics and a worsening fiscal outlook, the Japanese dairy industry has now seen its second big merger, following that of industry leader Meiji Dairies Corp. and top confectionery maker Meiji Seika Kaisha last April.
