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Poison Dumplings Kill Japanese Merger

A scandal over pesticide-tainted gyoza imported from China sparks a row and stops a deal between Japan Tobacco and Nissin Food Products
At a Tokyo supermarket 09 September 2007, a customer checks prices of cup noodles. Its price will rise for the first time in nearly two decades due to the rising cost of wheat and other crops.
At a Tokyo supermarket 09 September 2007, a customer checks prices of cup noodles. Its price will rise for the first time in nearly two decades due to the rising cost of wheat and other crops. YOSHIKAZU TSUNO/AFP/Getty Images

The overnight slump in U.S. stocks was the overwhelming reason for Japan's Nikkei 225 index plunging 4.7% on Feb. 6. But for Nissin Food Products, the company that brought the world instant noodles, it was the continuing fallout from a scandal over contaminated dumplings that sent shares into free fall, tumbling 8.5%.

Nissin's stock is the latest innocent victim of a batch of tainted, Chinese-made gyoza dumplings, imported by Japan Tobacco's food arm, which led to more than 10 cases of food poisoning. News of the poisonings broke last week (BusinessWeek.com, 1/31/08) and triggered a slew of recalls of products produced by Tianyang Food, the Chinese producer of the dumplings. A huge news story in Japan, the scandal also renewed fears among consumers over the safety of Chinese products.