Feb 25 - South Korean snack company Orion Corporation is under investigation by the country' food safety authorities over possible melamine contamination of a number of its products.
The inquiry was launched after the Korea Food and Drug Administration (KFDA) found melamine in imported food additives used in the manufacture of iron-fortified products. Officials issued a ban on 12 products that utilise the ingredient – including seven of Orion’s snacks.
A note from analysts Morgan Stanley forecast the issue may lead to a fall in the company’s sales and damage its image – regardless of whether its products are found to be melamine-contaminated or not.
Sales of the products caught up in the investigation account for up to 6% of Orion’s confectionery sales in South Korea. By the close of trading yesterday, Orion’s shares had tumbled 7.5%
Orion spokesman Hwang Hee Chang said the company’s own tests showed no melamine contamination in its products but said no official response would be made until results from the food safety body had been issued.