Fujiya 2007: expired milk, the family's exit, and Yamazaki's rescue of Peko-chan

Fujiya, opened in Yokohama in 1910, taught Japan Western sweets and made its pigtailed mascot Peko-chan as recognizable as Ronald McDonald. In January 2007 a labor-union tip exposed that it had used expired milk, cream, eggs and jam in products such as cream puffs — an internal investigation counted 18 cases over seven years at one plant. Cakes came off the shelves, the stock fell about 18 percent in a week, and president Rintaro Fujii, a sixth-generation family head, went on television: 'I am resigning to take responsibility.'

The rescue was decided within ten weeks. Fujiya handed Yamazaki Baking a reconstruction package: a Yamazaki vice-president would join Fujiya's board, the Ginza flagship store and headquarters land would be sold — set to raise about ¥10 billion and ¥13.5 billion — and Yamazaki would inject ¥15 billion for 33.3 percent of the shares, enough to veto key decisions at shareholder meetings. The alliance ran from quality control through production to distribution. Morinaga, Fujiya's old cross-shareholding partner, ended that tie-up the same week, leaving Yamazaki alone at the table.

Beverage sales restarted on March 19, 2007 and limited cake sales followed that Friday. By October the International Herald Tribune reported that Fujiya had resumed operations but was still struggling to win back credibility, in a year when Akafuku was suspended indefinitely and Meat Hope's executives were arrested for mislabeling. Japan avoided a second Snow Brand, whose 2000 tainted-milk outbreak had sickened more than 14,000 people.

Cake sales resumed within ten weeks; selling the Ginza flagship was set to raise ¥10 billion, with Yamazaki paying ¥15 billion for a 33.3 percent stake and veto rights.

The founding family absorbed the accountability itself: Fujii's televised resignation drew a line under the scandal instead of hiding behind denial, as Akafuku's president first tried.

Selling the Ginza flagship converted the firm's most sacred asset into the cash that funded rehabilitation — cutting deeper than any loan would have.

Yamazaki supplied what Fujiya fatally lacked: quality control across production and distribution, not just capital.

The 33.3 percent stake was calibrated to give the rescuer veto power without a full takeover fight, keeping the brand and its stores intact.

When a family brand breaks trust, the fastest survival route is giving up control: a rescuer with distribution muscle and clean hands can rebuild what the family can no longer defend.

Production and sales restarted in stages from March 2007. In October 2007 the International Herald Tribune reported that Fujiya was back in operation but still struggling to win back credibility, in a year when Akafuku was ordered to stop business indefinitely and Meat Hope's executives were arrested over mislabeling. Japanese media hammered the contrast with Snow Brand, whose 2000 tainted-milk outbreak sickened more than 14,000 people, and Fujiya's hurried surrender of control became the era's reference case for how a family firm survives its own scandal.