JULY 31, 2000 VOL. 156 NO. 4

Bad Milk Raises Old Fears: Where Are the Watchdogs?

ALSO IN TIME COVER: The Triumph of Style We don't want more; we don't even want better. We want things whose looks can kill. A new generation of designers brings style to everything from toothbrushes to computers JAPAN: Once Were Giants A week after the fall of Sogo, the Seibu department store chain runs into financial trouble. The good news: Japan may finally have learned that propping up ailing behemoths is a bad idea • Spilled Milk: A food scare points to regulatory apathy CHINA: Muzzle Defense Spooked by rising social unrest, Beijing tries to silence critics • Hong Kong: Did the government lean on a pollster? CINEMA: Show's Over An era ends with the closing of the last Chinese movie theater in New York City's Chinatown SPOTLIGHT MILESTONES TRAVEL WATCH: How to See Paradise with the Help of a Paddle

The product—milk—conjures up images of good health and clean living, and the label—Snow Brand—seems to suggest purity. But since the end of June, tainted milk sold by Japan's biggest dairy producer has left more than 14,000 people ill with vomiting and diarrhea and set off a nationwide food-poisoning panic. Though it was, in a narrow sense, a case of careless sanitation controls, the episode has once again raised broader questions—about irresponsible corporations concerned more with profits than with consumer safety and about the bureaucrats who fail to regulate the companies. "Snow Brand has totally betrayed the consumers' confidence," says Hiroko Mizuhara, secretary general of the Consumers Union of Japan. "If Snow Brand was doing this, other food makers may be doing the same thing."

It seems as if they have. The Health and Welfare Ministry last week said 70% of milk processing plants around the country haven't compiled procedural manuals or kept proper records on cleaning operations. In the wake of the crisis, the media have reported a rash of complaints ranging from a Kirin Beverage Corp. soft drink that tasted like rust to cheese made by Yotsuba Milk Products that contained pieces of plastic resin. And why, Mizuhara and others ask, was the ministry asleep at the wheel?

It was all eerily reminiscent of last year's nuclear accident at Tokaimura, in which workers mixing a uranium compound in a bucket triggered an atomic reaction. Two workers later died and dozens of people were irradiated. The procedure violated their company's in-house rules, which themselves violated guidelines set by the Science and Technology Agency, the industry's overseer. But agency officials, it turned out, had never done a spot check while the plant was running.

The Health and Welfare Ministry says local government officials inspected Snow Brand factories regularly and found no problems. The line at a milk factory in Osaka where bacteria got into the system was used only irregularly, which is why the inspectors couldn't catch the problem. Said a ministry official: "We can't check all the food. If the companies don't follow the rules, this kind of thing will keep happening."

Snow Brand is now fighting for its life. Accused of gross negligence and facing possible criminal charges, it has temporarily shut its 21 milk plants. Last week, health ministry officials fanned out around the country to conduct inspections—the plants won't open again before August at the earliest. Meanwhile, the company last week said it will take out an emergency loan of $270 million to tide it over. But the dairy giant isn't expected to be the next Japanese corporate failure. Even if things get worse, Snow Brand is too important to Hokkaido's already troubled economy to be allowed to go under, says Hideki Morioka, an analyst at Kokusai Securities in Tokyo: "Snow Brand won't simply go bankrupt like a regular company." Apparently it's not just physical health that's tied to milk.

—Reported by Sachiko Sakamaki/Tokyo

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