Beleaguered Japanese dairy group Snow Brand Milk Products will merge with two farming cooperatives – the National Federation of Agricultural Cooperative Associations and the National Federation of Dairy Cooperative Associations.

According to a report in the Nihon Keizai Shimbun, the three parties will set up a new entity to combine their milk businesses. Ahead of the merger, some 1000 of the companies’ combined workforce of 3300 will be reduced to 2300, with most of the redundancies coming at Snow Brand.

The three companies currently operate 20 plants – five will be closed, says the report. Weakened by a series of scandals including a mass food poisoning in 2000 and more recently a mislabelling scam at a now obsolete meat subsidiary, Snow Brand is hardly in a position to demand better terms from its merger partners.