Hankyu Hanshin Hotels Co. has allegedly been misrepresenting items on its menus for seven years at 23 restaurants on its properties and at other establishments, possibly misleading up to 79,000 customers in the process. Management is blaming the situation on employees ignorant about the law. However, in Japanese tradition, top managers are accepting responsibility and subjecting themselves to self-imposed punishment of the yen-denominated kind.
According to a Japan Times story published on October 25, the hotel chain has been flooded with phone calls from upset clients who are demanding reimbursement for their meals. Nobody, however, claims to have been sickened from consuming menu items that may not have been served exactly as advertised.
“The wrongdoing, which according to media reports included claiming on menus that frozen fish was fresh, prepared chocolate was hand-made, and boasting a prestigious red caviar that turns out was flying fish eggs, started in March 2006 and ended last month,” wrote Tomohiro Osaki, the article’s author. “As of Thursday morning, the firm had reimbursed 3,480 customers to the tune of ¥12.2 million. The company estimates the final amount of compensation may reach ¥110 million.”
Hiroshi Desaki, president Hankyu Hanshin Hotels Co., insisted that the chain never intended to fabricate its menus, noting that the items were mislabeled by employees who lacked legal knowledge.
“Our employees, be they chefs or salespeople, just didn’t understand the standard laws concerning food labeling. So even in finding menus that lied about the fare, they just didn’t know they weren’t allowed to serve the (misrepresented food),” he said.
Desaki has apologized for betraying the public’s trust, commenting: “We never intended to rake in profits by (misrepresenting food).”
In Japan, there are real consequences for leaders whose companies lose face under their watch – even if they are not personally responsible. The Japan Times reported that 10 executives, including Desaki, would receive pay cuts as a result of the scandal. Desaki’s salary will be slashed by 20%, while Kazuo Sumi, president of Hankyu Hanshin Holdings Inc., has agreed to take a 50% cut in pay.
Story Update:
On Monday, October 28, the Kyodo news agency reported that Desaki will be subject to more than a salary reduction. Taking full responsibility for the menu mislabeling, he will resign as president effective November 1. “We betrayed our customers, and we can’t deny the allegation that we falsified our menus,” he stated during a press conference in Osaka.
