Trading house buying Snow Brand unit


President Koshiro Iwase is overseeing Snow Brand Food's liquidation, a fallout from a disguised-beef scandal

TOKYO, Japan (CNN) -- Snow Brand Foods Co. plans to sell its food-additives business to trading company Nissho Iwai Corp. on March 31.

Both companies confirmed the deal on Friday.

Snow Brand Food is in liquidation, the fallout of a scandal over disguising beef. That process is slated to wrap up by the end of April (full story).

The sale comes days after Snow Brand Milk said it was seeking a broad alliance with another food cooperative, on its milk and other businesses (full story).

Snow Brand Food's additives business sells additives and ingredients used in jellies, jams and other kinds of food. The company says it wracked up sales of 6.3 billion yen this business year.

Nissho Iwai states the transaction is worth 1 billion to 2 billion yen. Other reports peg it at 1.5 billion yen ($11.3 million).

Recovery from scandal

In January, Snow Brand admitted it deliberately mislabeled Australian beef as Japanese, to claim a government subsidy.

The subsidy was intended to benefit companies left with a backlog of Japanese meat after the discovery of Asia's first case of mad-cow disease there.

Its parent, Snow Brand Milk, is itself struggling to recover from a food-poisoning disaster over its milk that left thousands sick around Osaka in June 2000.

It has also confessed to relabeling, then using past-due frozen butter (full story).