Snow Brand Milk, the Japanese dairy company rocked by scandals, has unveiled a new rescue plan.

Backing is to come from the National Federation of Agricultural Co-operative Associations, known as Zen-noh, and trading firm Itochu.

The plan includes spinning off Snow Brand’s loss making milk business. It will be integrated with the milk operations of Zen-noh and the National Federation of Dairy Co-operative Associations.

This is seen as an easy way for the business to secure milk supplies.

Snow Brand’s president Kohei Nishi and the company’s eight directors will resign after a shareholders meeting at the end of June, taking responsibility for the mismanagement that led to the poisoning of over 14,000 people from drinking Snow Brand milk in 2000 and a beef mis-labelling scandal earlier this year.

Snow Brand has seen its brand value fall E600 million since 2000.

However, industry commentators doubt whether Itochu and Zen-noh can add any credibility to Snow Brand’s products and regain consumer confidence.

Itochu has little dairy industry experience and a Zen-noh affiliate was accused of mis-labelling chicken in March.

Itochu is understood to be interested in Snow Brand to gain control of its frozen foods operation and boost its own food and distribution business. It is also thought to be interested in teaming up with Chesco, Snow Brand’s imported cheese marketing company.

Originally, Snow Brand was expected to seek a partnership with Nestle, as the companies already have a partnership developing drinks. However, Nestle claimed that Snow Brand was too involved with farm policy.

Also, the Japanese government warned Snow Brand against a tie-up with foreign partners, claiming it could have a detrimental effect on Japanese dairy farmers.

Snow Brand Foods, the subsidiary rocked by a beef mislabelling expose, will be liquidated at the end of April.