Analysis on the profitability structure of milk businesses under the state of milk overproduction: With a focus on the Snow Brand's mass food poisoning

Shimizuike, Y.; Iizawa, R.

Analysis on the profitability structure of milk businesses under the state of milk overproduction: With a focus on the Snow Brand's mass food poisoning

2005

Shimizuike, Y.(Hokkaido Univ., Sapporo (Japan)) | Iizawa, R.

This study examined the background of the mass food poisoning of June, 2000, caused by Snow Brand Milk Products Co. Ltd., by analyzing the profitability structure of the milk production business. The company had suffered reduced profits under the fierce competition of the industry in the 1990s. The company attempted to increase profitability by cutting various costs, not by improving their low capital productivity, making it shy 'away from active capital investment. That slowed down the rate at which the technological level of production facilities improved. Furthermore, in order to increase production, manufacturing facilities were added, not renewed. As a result, their manufacturing process became mutated, leading to the occurrence of hygienic problems that could not be predicted in the designing stage of the system.

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