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Thursday, June 28, 2007

Skeptical shareholders get apology from Fujiya


Staff writer

Fujiya Co. President Yasufumi Sakurai apologized Wednesday to shareholders for the confectioner's food sanitation problems that forced the suspension of operations at nearly 900 retail outlets and restaurants.

"We apologize to the shareholders from the bottom of our heart for causing enormous trouble due to the incident," Sakurai said, bowing to the shareholders at the annual general meeting.

He said that because the founding family had managed the company for all of its 97 years — until January when Sakurai took the top job — employees gave more weight to what executives said and not the customers, and waited for instructions instead of acting on their own.

The 972 shareholders who attended the meeting in Tokyo replaced Fujiya's entire board of directors, except for Sakurai, who took his post after it was discovered the firm had been using expired ingredients, and auditors with 12 new board members and four auditors.

Sakurai also apologized for the firm's failure to pay dividends for business 2006 because of the company's losses.

In January, it was reported by the media that Fujiya had been using expired ingredients in its cream puffs. Fujiya came out shortly afterward and confirmed the reports.

The financial result of the scandal was a company net loss of 8 billion yen for the business year to March and sales falling 24.7 percent to 63.9 billion yen.

Many of the shareholders at the meeting were skeptical about Fujiya's new sanitation policies and whether they were being followed by all outlets.

"When I went to a Fujiya shop with my child, employees were wearing gloves, hats and masks when they were decorating cakes," said one shareholder. "But I'm not sure all of the employees in other shops are doing the same."

Sakurai admitted that while Fujiya had revised its manuals and held training sessions, not all of the workers were following company procedures.

He said he would make sure the procedures were being followed closely.

Another shareholder who is apparently a big fan of the confectioner said she feared the Fujiya brand will disappear because it formed capital ties with Yamazaki Baking Co.

"For customers in general, Yamazaki is a bakery and Fujiya is a confectioner," she said. "I don't want the Fujiya brand to be mixed up with Yamazaki."

In April, Yamazaki purchased 35 percent of Fujiya's shares for 16 billion yen, turning the top confectioner into an affiliate.

Sakurai assured the shareholder that the Fujiya brand will not disappear. "The capital ties with Yamazaki will allow its sanitation technology to be introduced to Fujiya," he said.

Yamazaki President Nobuhiro Iijima, who attended the meeting and became Fujiya's adviser Wednesday, said the company will help strengthen Fujiya's operation of its factories and production, which were the confectioner's weak points.

For related stories:
Fujiya descends into 8 billion yen net loss
Lawson, 330 other stores restock Fujiya sweets
Fujiya used out-of-date cream until Jan. 5



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