Separating the drinking-milk business and accepting a Zen-Noh-led rescue (2002)

The six years it took for an entrusted business to come back

What Snow Brand actually chose here was not to sell a business for cash but to entrust a loss-making business to a party able to carry it, and to shrink the parent back to the range where it could pay its way. Cutting the drinking-milk business away stopped the bleeding at the parent, but because the party it went to was a producers’ organization close to non-profit, there was no guarantee it would be made to pay there either. That was the point the trade press kept returning to at the time: the know-how of running a consumer-facing brand was thin on Zen-Noh’s side. Together with the fact that the president’s preference for Nestlé did not prevail, the range of choice was extremely narrow.

In the event, Nippon Milk Community fell into negative net worth in its first year, and it was Snow Brand’s own rebuilding that moved faster. The entrusted business, though, had not disappeared. In October 2009 the two companies combined under the joint holding company Megmilk Snow Brand, and the milk and the dairy products separated seven years earlier were back inside one group. Nishi Kohei’s words of 28 March 2002 — that this was “not a dismantling” — were borne out, at least on the question of where the businesses ended up, six years later.