Article published on November 9th, 1984.

HEADLINE: PAY CUTS

Leading Japanese confectioner Morinaga has announced temporary 20 per cent salary cuts for 19 executives to cope with the sharp drop in its sales sparked by a gang who poisoned its products. Plans to postpone and curtail winter bonuses for it's 20,000 full-time workers are also being considered.

HEADLINE: MORINAGA FORECASTS LOSS OF 800M YEN AS SALES PLUNGE

Morinaga and Co. a major Japanese confectionery under attack by extortionists who have poisoned some of its sweets, said that it's sales were falling sharply.

It predicted a 800 million yen loss in fiscal 1984 which ends next March 31. Spokesman Ishikawa Shigeru made the forecast after the company issued it's business report for the six months ended Sep 30.

Morinaga had a sales target of 6.1 billion yen worth of sweets in October, but sold only 2.4 billion yen worth. The sales fell after the extortionist group, calling itself "The Monster with 21 Faces," planted at least 18 boxes of poisoned candy-- mostly on store shelves-- in early October after demanding 100 million yen from Morinaga.

Thousands of stores throughout Japan have stopped carrying Morinaga candy on their shelves.

The poisoned candy found so far all has been labelled poison, but the extortionists threatened to start putting unmarked poison candy on store shelves, touching off a nationwide alert. No one has been reported hurt so far by poisoned candy.

Mr. Ishikawa said that Morinaga's sales for April-September rose by 8.7 per cent from a year earlier to 6.1 billion yen. But its net profit fell by 46.1 per cent from the same period last year to 1.372 billion yen because of a rise in prices of raw materials.

For fiscal 1984, Mr. Ishikawa said that Morinaga's sales were expected to fall by 6.6 percent from fiscal 1983 to 11.4 billion yen, leaving a net loss of 800 million yen (net profit of 4.226 billion yen).