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The Osaka-based company, which has been hit by a series of kidney disease incidents linked to red yeast rice products since late March, estimated product recall-related losses at 3.65 billion yen (US$23 million).
The estimate was calculated based on historical sales data and previously recalled products, the company said in its earnings call.
The company reported that it had recorded an additional 213 million yen (US$1.37 million) in impairment losses on manufacturing equipment related to the incident.
Since then report ofIn late March, an outbreak of kidney disease related to the consumption of Red Yeast Cholesterol Help products prompted Kobayashi Pharmaceutical and its 52 business partners that use red yeast extract to recall the affected products.
The uproar has also rattled the red yeast rice industry in other regions, with authorities in South Korea and Taiwan issuing advisories to consumers.
The Taiwan Food and Drug Administration also announced the suspension of the use and sale of Kobayashi Pharmaceutical’s red yeast rice ingredients and related products.
Puberuric acid was identifiedAs one of the ingredients unexpectedly found in affected red yeast rice products.
As of May 19, Japan’s Ministry of Health, Labor and Welfare announced that 1,594 consumers had sought medical attention and 276 had been hospitalized as a result of ingesting the red yeast rice products. Five deaths have been reported so far.
Kobayashi Pharmaceutical announced that in addition to recalling the product, it would also cover the medical expenses of consumers suspected of being affected.
“At this time, the causative agent, mechanism of action, and the relationship between our products and kidney-related diseases are unknown.
“As an interim measure until the cause is determined, on April 25, 2024, we confirmed that there is a correlation between the consumption of our red yeast rice products and the symptoms.
“We have announced that we will begin paying actual expenses such as medical expenses to customers suspected of being involved.”
Due to the ongoing litigation, Kobayashi Pharmaceutical has withdrawn its full-year earnings forecast announced on February 9, and the full-year earnings forecast has not yet been determined.
“At this point, it is extremely difficult to assess the impact. For this reason, we have temporarily withdrawn our full-year consolidated performance forecast for the fiscal year ending December 2024 and have not yet decided on it.
“We will make another public announcement when we are able to calculate our business forecasts.”said in a statement.
The company previously said it would report sales of 185.6 billion yen (US$1.19 billion) this year, up from 173.5 billion yen (US$1.11 billion) last year, and net profit attributable to shareholders of 20.5 billion yen. (US$131.5 million) – higher than last year’s 20.3 billion yen (US$130.5 million).
The company, which also sells antipyretic pads “Cool Fever” and has been the owner of US supplement and general pharmaceutical company Focus Inc. since October last year, posted sales of 36.5 billion yen in the first quarter, up 9% from the same period last year. announced. (US$234 million).
Operating profit increased 5.7% to 5.46 billion yen (US$35 million).
However, net income attributable to shareholders decreased 72.9% to 976 million yen (US$6.26 million).
Kirin: Supplement market is in “turmoil”, “pay attention” to the future
Since the incident, companies such as Kirin have also beenI was confused.”The supplement market and it “Please pay attention to future developments.”
“The red yeast rice issue has caused confusion in the supplement market, but the Kirin Group does not have any products that use the red yeast rice produced by Kobayashi Pharmaceutical.
“While we do not expect the financial impact on the group as a whole to be significant, we will keep a close eye on future trends in the supplement market.”At Kirin’s first quarter results presentation on May 9th, Hiroaki Takaoka, Senior Executive Officer and Head of Corporate Strategy Department, said the following.
Kirin’s health science division consists of its own branded supplement products, Blackmores products, and Kyowa Hakko Bio’s functional materials business, and sales in the first quarter of this year increased by 83.8% to 31.9 billion yen (204.7 million yen). US dollar).
In Japan, the LC plasma business, which consists of both finished products and raw materials, also reported a 33% increase in revenue.
Hiroaki also emphasized that the company has a quality compliance department that controls product quality.
“Prior to the launch of the Food with Function Claims System, the Kirin Group established an organization called the Quality Compliance Office as an independent department to check the quality of Kirin Group products, and established a system to rigorously check the effectiveness of foods with function claims. A third party will handle everything from basic research to post-launch.
“In order to minimize the impact of quality issues like this, we will continue to make improvements to maintain and improve our group’s quality assurance level.”
Market research firm Fuji Keizai also said in April that it was optimistic that Japan’s functional food industry would continue to grow.
“Sales of supplements have been sluggish due to stricter advertising regulations, but food and drink products have been aggressively introduced with the concept of complete nutrition as the driving force, promoting efficacy such as improving fat and cholesterol levels and supporting sleep. ” It was written.
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“Kobayashi Pharmaceutical reported an ‘extraordinary loss’ of approximately US$25 million (3.86 billion yen) in its first quarter results due to contaminated red yeast rice products, raw material recalls, and compensation.”
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