Activists opposed to Chinese government ties with Japan may have contaminated Chinese-made dumplings that caused 10 people in Japan to fall ill, Japanese media quoted a senior Chinese food safety official as saying on Wednesday.
The discovery of pesticide on the dumplings has received widespread media coverage in Japan, prompted health queries from nearly 4,000 people and led the importer of the dumplings, Japan Tobacco Inc, and rival Nissin Food Products Co Ltd to call off the planned merger of their frozen food operations.
"A small group who do not wish development of Sino-Japanese friendship may have taken extreme measures," Kyodo news agency quoted Wei Chuanzhong, vice minister of the General Administration of Quality Supervision, Inspection and Quarantine, as telling a Japanese fact-finding mission in China.
Japan's health minister has also raised the possibility that the food had been deliberately contaminated. Chinese government officials were not immediately available to comment.
Japanese police are investigating the case as attempted murder after a 5-year-old girl fell critically ill after eating the dumplings, a popular meal in Asia known as gyoza in Japan. The girl has since recovered.
In a sign of how emotive the issue has become, the head of a visiting delegation of Chinese officials was in tears as he talked to the media.
"I call on the Japanese media to trust the governments of both countries and to aim for objective reporting," said Li Chunfeng, vice director of China's Import and Export Food Safety Bureau.
A joint Chinese-Japanese investigation into the Chinese food factory that was the source of the dumplings had found nothing amiss at the plant, Chinese state media reported.
FROZEN FOOD CRISIS
The food scare led Japan Tobacco to reject a proposal by Nissin, the pioneer of instant noodles, to take control of its frozen food unit in a deal which would have formed Japan's biggest frozen food firm.
"We felt there were differences between JT and us on the issue of safety," Nissin President Koki Ando told a news conference.
"We wanted to take the lead on safety and do so from a position of responsibility, but JT wanted to be responsible so our proposal was knocked back," Ando said.
Japan Tobacco, the world's third biggest cigarette maker, had planned to combine its frozen food business with that of Nissin after buying a third frozen food firm, Katokichi Co, for $1 billion (Dh3.67bn) and selling a 49 per cent stake in Katokichi to Nissin.
"Our frozen food business is in a state of crisis," Japan Tobacco Chief Executive Hiroshi Kimura said. "First we have to get our and Katokichi's food business back on track."
Japan Tobacco has already bought 94 per cent of Katokichi and plans to make it a wholly owned unit as soon as possible. It says it will have no trouble paying for the whole company with existing cash flow.
Shares of Nissin, which has been seeking growth outside of instant noodles, tumbled 7.8 per cent to 3,300 yen compared with a 4.7 per cent decline in the overall market. Japan Tobacco dropped 0.9 per cent to 572,000 yen.
But some analysts said Nissin was well out of the deal.
"The investment wouldn't have been worth what Nissin would have paid," said analyst Tokushi Yamasaki at the Daiwa Institute of Research. "JT here is the loser as it now has to pay for Katokichi by itself and the business no longer deserves the premium it got."
Japanese media have reported Japan Tobacco also faces an insider trading probe after its shares tumbled 8 per cent on January 28, two days before it announced it was recalling the dumplings.
The company on Wednesday played down the likelihood of any improper trading and said it had yet to hear from regulators.
"The number of people who would have known of the problem was very few, and it is difficult to imagine there was insider trading," Kimura said.
The dumpling mystery has become a domestic headache for Prime Minister Yasuo Fukuda, given criticism from media and opposition lawmakers that it took too long to alert the public after the first consumers fell ill in late December.
Both countries seem eager to keep from harming two-way ties ahead of a high-profile visit by Chinese President Hu Jintao this spring, the first such trip in a decade.
Japan, always sensitive about food security, imports more than one fifth of its frozen food from China. (Reuters)
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