Police search seafood companies over false labeling of eel products

KOBE (Kyodo) Police raided two seafood companies Thursday to investigate a false-labeling scam in which the firms allegedly passed off grilled eel farmed in China as having been raised in Japan.

Bode eel: Police investigators remove boxes Thursday from Shinko Gyorui Ltd. in Kobe as evidence for an alleged false-labeling case involving eels imported from China. KYODO PHOTO

The search targeted the business office of Osaka-based seafood importer Uohide and the headquarters of Kobe-based wholesaler Shinko Gyorui Ltd., a subsidiary of Maruha Nichiro Holdings Inc., a top seafood company listed on the Tokyo Stock Exchange.

The two companies are suspected of having sold some 3,600 kg of falsely labeled grilled eel to three intermediate wholesalers between April 15 and June 13 in violation of the Unfair Competition Prevention Law, police said.

The practice is believed to have earned Uohide at least ¥200 million in profit, as grilled eel raised domestically sell at prices two to three times higher than those farmed in China.

Uohide also allegedly labeled eel raised in China as those farmed in Aichi Prefecture, using the label of a fictitious company, and sold them to Shinko. The two then collaborated in selling these products to other wholesalers.

Police aim to collect documents to establish a fraud charge, which carries a heavier penalty than violating the Unfair Competition Prevention Law, the sources said.

According to the Agriculture, Forestry and Fisheries Ministry, the two firms sold a combined 256 tons, or 2.05 million eels, to wholesalers. Uohide allegedly paid about ¥440 million to buy the eels and received about ¥730 million from Shinko.

In late June, the presidents of both Uohide and Shinko owned up to the false labeling.

According to the ministry, 12 cases of falsely labeled eel have been discovered since September. In most cases, Chinese or Taiwanese eel were passed off as Japanese.

The latest case came to light after consumers alerted the ministry in May using its hotline on food labeling and reported eel that were unusually cheap for a domestic product.