Kobayashi Pharmaceutical After Beni-Koji

TYO:4967

Kobayashi Pharmaceutical built its name on small, clever household and health products that solve everyday problems. In March 2024 that reputation was shaken when supplements containing its beni-koji (red yeast rice) ingredient were linked to serious kidney problems. The crisis led to a full exit from the beni-koji business, the departure of the founding family from management, and a debate across Japan about how health foods should be regulated.

A Company Built on Small Ideas

Kobayashi’s roots go back to 1886, when Chubei Kobayashi opened a general merchandise and medicine business in Nagoya. The company later moved its base to Osaka, where it is still headquartered, and it is listed on the Prime Market of the Tokyo Stock Exchange (4967).

Its strategy is easy to describe. Kobayashi looks for small problems that larger companies ignore, then launches niche products with plain, memorable names. Its long-running slogan, roughly “making the things you wish existed”, sums up the approach. Well-known lines include:

• Netsusama Sheet — cooling gel sheets for fevers, also sold abroad
• Bluelet — toilet bowl cleaners and fresheners
• Sawaday and Shoshugen — air fresheners and deodorisers
• Eyebon — eye wash
• Ammeltz — topical pain relief liquid, popular in Asia

Before the crisis, annual sales were roughly ¥170 billion, with overseas business growing in China, Southeast Asia and the United States.

What Happened With Beni-Koji

Beni-koji is rice fermented with a red mould, used for centuries in East Asia as a food colouring and in fermented foods. Kobayashi produced it as an ingredient and sold supplements such as “Beni-Koji Choleste Help”, marketed under Japan’s Foods with Function Claims system to help lower cholesterol.

On 22 March 2024, Kobayashi announced a recall of three beni-koji supplements after reports of kidney disease among users. It later emerged that the company had received the first report from a doctor in January, about two months before the public announcement. That delay became the centre of public criticism.

The Cause

Japan’s health ministry and national research institutes found puberulic acid, a substance produced by blue mould, in some production lots. Investigators concluded that the mould had contaminated beni-koji made at the company’s Osaka plant. Hundreds of people were hospitalised, and deaths were reported among users, which made this one of the most serious health food incidents in Japan’s recent history.

A Wider Supply Chain

Kobayashi did not only sell its own supplements. It also supplied beni-koji as an ingredient to dozens of other food and drink makers in Japan and overseas, including Taiwan. Many of those companies had to recall their own products, which spread the impact far beyond one brand.

The Aftermath

The new management has focused on quality control, faster reporting of health problems and stronger oversight from independent directors. Rebuilding trust with retailers and consumers is a slow process, but the core household and over-the-counter brands have remained on shelves.

A Turning Point for Japan’s Health Food Rules

Japan created the Foods with Function Claims system in 2015. It lets companies make health claims based on their own scientific evidence, filed with the Consumer Affairs Agency rather than approved in advance. The beni-koji case exposed the weak points of that model.

The government responded with stricter rules. Companies must now report suspected health problems to the authorities quickly, and supplements sold under the system must be produced to good manufacturing practice (GMP) standards. For the wider supplement industry, compliance costs and expectations of transparency have risen.

Why It Matters for Overseas Partners

• Distributors and retailers — Kobayashi’s household brands remain strong, but partners will want clear evidence of upgraded quality and reporting systems.
• Investors — The case is a reference point for governance at family-led Japanese companies, and for how activist pressure can shape board reform.
• Supplement and ingredient buyers — Japan’s tighter rules mean stronger documentation from Japanese suppliers, which can make sourcing safer but slower.

Conclusion

Kobayashi Pharmaceutical’s talent for spotting small consumer needs made it one of Japan’s most recognisable household brands. The beni-koji crisis showed what happens when speed to market is not matched by safety systems and fast disclosure. How the company completes its reform under non-family leadership will shape not only its own recovery, but also how the world views Japan’s health product industry.