Kobayashi Pharmaceutical’s Lax Crisis Management for its ‘Benikoji’ Supplement Stands out

By Hiroyuki Kume and Ko Terada / Yomiuri Shimbun Staff Writers

17:54 JST, March 30, 2024

OSAKA – Kobayashi Pharmaceutical Co. was late to publicize the health problems caused by its benikoji red rice mold supplements, the company’s president said at a press conference in Osaka on Friday, addressing the latest cases of adverse health effects caused by the products.

The incident, in which five people have died, has shined a light on the Osaka-based company’s lax crisis management and shaken the system of Food with Function Claims.”

Insufficient information sharing

“We want to put all our efforts as a company into improving our crisis management system,” the company’s president, Akihiro Kobayashi, emphasized at the press conference.

In the Consumer Affairs Agency’s guidelines for businesses that manufacture and sell products with so-called function claims, companies are asked to “promptly report health hazards even if related information is insufficient,” given that their products are consumed by many people.

However, more than two months had passed since the company first learned about the health hazard before it made that information public on March 22. People who continued to buy the product during those two months were among the five who died.

The company failed to share sufficient information internally too. On March 1, the company even released publicity material for a product with function claims marketed by a company to which Kobayashi supplied benikoji as an ingredient.

On the one hand, Kobayashi admitted, “It’s correct to say that we were late in releasing the information.” On the other hand, he explained that his company had been aware of the Consumer Affairs Agency’s guidelines when it acted.

Even if the company had released information about the substance that caused the problems at the earliest time possible, it would have been March 18, the day management shared that information, he explained.

Health-awareness boom

In the background of the current expanding supplement-caused health crisis is the rising popularity of functional foods, itself an offshoot of a general health-awareness boom in recent years. Since the functional foods system started in 2015 as part of a government-led growth strategy, the market has developed steadily.

According to research firm Fuji Keizai Group Co., the functional foods market is expected to grow 2.7 times more in 2024 than five years ago.

Leading food and pharmaceutical companies have entered the market one after another, as bringing functional foods to market requires simply submitting to the government data that shows, among other things, the product’s efficacy.

An official at a food manufacturer said, “There’s a big advantage in being able to put [a product] on the market ‘cheaply and quickly.’ It makes it easy to enter the market.”

This is the first case of a product being recalled voluntarily due to health concerns. But there has been a spate of cases in which the agency ordered companies that made exaggerated claims, such as “You can lose weight just by taking this,” to pay a fine under the Law against Unjustifiable Premiums and Misleading Representations. This has led to public skepticism about the reliability of these products.

In response to the latest incident, the agency sent a letter of inquiry to businesses that manufacture or sell functional food products — approximately 6,800 in all — asking whether or not they had found any adverse health effects. There is a possibility that the system will be reviewed.