Snow Brand Milk Products Co. said Tuesday it will sell its wine-making unit, Snow Brand Belleforet Winery, to major confectionery chain Chateraise for 400 million yen by the end of the year.

The Yamanashi Prefecture winery is an unlisted, wholly owned subsidiary of Snow Brand Milk, which is restructuring its business after being hit by a series of scandals.

Under an agreement between the troubled dairy products maker and Chateraise, an unlisted firm based in the same prefecture, all 176,000 outstanding shares in Snow Brand Belleforet will be transferred to the confectionery chain on Friday.

The winery's fixed assets will be taken over by Chateraise in late December, Snow Brand Milk said.

Snow Brand Milk will book an extraordinary loss of 700 million yen in its October-March earnings for the deal, but this has already been factored into its full-year earnings projections, it said. The company expects a consolidated net loss of 23 billion yen and a pretax loss of 25 billion yen on group sales of 686 billion yen. The projection was released on Friday.

The Snow Brand group's business deteriorated drastically following a food-poisoning case in 2000 caused by milk products made by the parent company. That scandal was followed earlier this year by the discovery that imports of beef had been deliberately mislabeled by a subsidiary, Snow Brand Foods Co.

Snow Brand Milk, which will become a butter and cheese firm Jan. 1 after spinning off the loss-making milk division, hopes to return to the black in fiscal 2003 and resume dividend payments in fiscal 2006. It has skipped dividend payments since fiscal 2000.