Top Management Message June 2, 2002

As has already been reported in the media, a foreign object was found in a rice ball product (Gikimaki Onigiri Ishiyakifu Bibinba), which is sold at Lawson stores in Miyagi, Yamagata and some parts of Fukushima, on May 31.

I sincerely regret any concern this incident may have caused shareholders and investors.

Products manufactured by Nihon Fresh Delica Co., Ltd., the company that made the affected rice ball, were immediately recalled from all Lawson stores. We are now taking delivery from other vendors.

Recognizing the gravity of this incident, we are redoubling efforts to manage product quality to prevent such an incident from reoccurring.

The following is a detailed report for shareholders and other investors on what we currently know regarding the incident, including the cause, the effect on sales, and the countermeasures we have launched. We will report promptly on any new information, developments and responses.


  • 1) May 31 (Friday), 02:00 approx.
  • 2) Maker Nihon Fresh Delica Co., Ltd. (Sendai Factory)
  • Address: 5-27-5, Sendagaya, Shibuya-ku, Tokyo
    Capital: ¥16 million
    Established: March 1991
    No. of Lawson stores supplied by the Sendai Factory: 225 (As of May 31, 2002) (Sendai: 166 stores; Yamagata: 56 stores; Fukushima: 3 stores)
    Transactions with Lawson (Fiscal 2001): ¥2,788 million (About 2.3% of total transactions with main dish vendors)
  • 3) Events The following is a timeline of events, based on the information Lawson has at the present time.

May 31 (Friday), 02:00 approx.

  • - The fingertip of the right index finger of a part-time female employee was severed by a rice ball pressing machine and was mixed in with a rice ball.
  • - The part-time worker lost a considerable amount of blood and was taken by taxi to an emergency hospital. The hospital was contacted in advance.
  • - The head of Nihon Fresh Delica's Sendai Factory ordered the factory foreperson to dispose of all inventories made at the time the accident occurred and to clean and sterilize machinery. The factory head then went to the hospital to visit the employee involved in the accident.
  • - The factory foreperson disposed of 12 rice balls from the production line and resumed operations after machine parts were sterilized.

May 31 (Friday), 22:00

  • - The customer who purchased the rice ball concerned at the Sendai 2-chome store, returned to the store to report their discovery.
  • - During discussions with the store manager, the customer became sick and was taken to hospital by the store manager.

May 31 (Friday), 22:30 approx.

  • - The store manager reported the customer's condition to Lawson's regional office manager.

May 31 (Friday), 23:00 approx.

  • - Lawson and Nihon Fresh Delica decided on the following response after discussions:

June 1 (Saturday), early morning

  • - Lawson and Nihon Fresh Delica decided on the following response after discussions:
  • - l Both companies should extend their sincere apologies to the customer concerned
  • - l Production of products manufactured by Nihon Fresh Delica should be consigned to another maker and factory.

June 1 (Saturday), afternoon

  • - Representatives from Lawson and Nihon Fresh Delica visited the customer concerned to express their apologies
  • - Nihon Fresh Delica received an administrative order from the Sendai City Hygiene Section
    (Nihon Fresh Delica voluntarily halted rice ball production, recalled products, and made an announcement to the media)
  • - An e-mail was sent to Lawson's franchise owners and employees explaining the situation
  • - Lawson sent a statement to the media

2.Cause of the Accident - Lawson's Viewpoint

Nihon Fresh Delica should have immediately reported the incident to Lawson. Discussions should then have been held to formulate a response. This did not happen. As outlined in 1) to 3) above, Lawson did not learn of the accident at the factory until nearly one day later, and after the customer had reported the discovery. Lawson believes that the factory's failure to recognize the seriousness of the situation and initiate an appropriate response were the main reasons for the incident.

3.Condition of the Customer

Out of privacy considerations, Lawson wishes to withhold further comment on the condition of the customer concerned. That said, Lawson and Nihon Fresh Delica are responding appropriately.

4.Future Actions

As a retailer of the product concerned, Lawson is not without responsibility and recognizes the gravity of the situation. Lawson is thus moving quickly to enhance quality assurance and manufacturing processes at factories nationwide that make boxed lunches, rice balls, processed noodles, processed breads, delicatessen and other items, to prevent a repeat of this incident.

5.Effect on Results

At 18:00 on Sunday, June 2, operations managers in all regions throughout Japan were contacted. Sales on June 2 in the Tohoku region, including Sendai where the accident occurred, were affected slightly due to insufficient deliveries of main dishes. In other regions, at the present time, we believe the incident has not affected sales. We are keeping a watchful eye on the situation to determine whether the accident has had medium-term consequences, and will report in more detail at a future time.

(Reference) Rice Ball Sales in Fiscal 2001
Nationwide (47 prefectures): Approx. ¥60 billion (Approx. 4.7% of fiscal 2001 total net sales of Lawson stores)
Tohoku region (Total of 627 stores in Aomori, Iwate, Akita, Miyagi, Yamagata, Fukushima as of May 31, 2002): Approx. ¥4.4 billion

Again, I wish to express my regret for any concern this incident may have caused shareholders and investors. We are fully aware of the gravity of the situation and will take steps to improve quality assurance to prevent a reoccurrence. I sincerely ask for your continued support and guidance.

June 2, 2002

Takeshi Niinami
President and CEO

Archives(Back Numbers)