Moody's Investors Service Inc. said Friday it has placed Nippon Meat Packers Inc.'s A3 senior unsecured long-term debt rating under review for possible downgrade, following the mislabeling scandal at the meat processor's subsidiary, Nippon Food Inc.
Nippon Food, a wholly owned subsidiary of Nippon Meat Packers, admitted Thursday it had passed off imported beef as domestic to receive government subsidies under a buy-back program set up after mad cow disease hit Japan.
Moody's said it was concerned the fraud "may have a significantly negative effect on Nippon Meat Packer's brand image, its earnings and cash flow."
"Moody's review will focus on Nippon Meat Packer's ability to manage and control the risks that may threaten the company's franchise value and its management's capability to implement effective strategies and measures necessary to regain its competitiveness," the U.S. credit-rating agency said.